RathGibson sets May Chapter 11 plan confirmation hearing

RathGibson Inc., a manufacturer of welded tubing products, scheduled a May 21 confirmation hearing for approval of the Chapter 11 plan after the bankruptcy judge approved the explanatory disclosure statement last week.

The bankruptcy judge previously scheduled a May 19 auction where the first bid of $93 million cash will come from a group including some of the existing secured lenders and holders of 70 percent of the $209.5 million in 11.25 percent unsecured notes.

The sale finances the plan that is built around a settlement with creditor groups.

The original plan was negotiated with holders of 73 percent of the senior unsecured notes before the Chapter 11 filing in July.

The Lincolnshire-based company listed assets of $305 million against debt totaling $319 million. In addition to $209 million in senior notes, debt included $55.3 million on secured credit agreements and $10.4 million owing to trade suppliers. The holding company was also liable on $115 million in pay-in-kind notes. A group including management and an affiliate of DLJ Merchant Banking Partners acquired control of RathGibson in June 2007.

The case is In re RathGibson Inc., 09-12452, U.S. Bankruptcy Court, District of Delaware (Wilmington).