Forward Motions: Momentive Moves Closer to Restructuring Approval

Tuesday in White Plains, N.Y., Momentive Performance Materials Inc.’s first-lien lenders will ask a bankruptcy judge if they can vote “yes” to the company’s restructuring plan even though they already voted no.

Changing the vote to yes would pay those bondholders in full, in cash, the nearly $1.5 billion they are owed. Previously, more than 80% of them voted to reject the plan, as part of an argument to collect so-called make-whole payments, or premiums they felt Momentum owed them for refinancing their bonds.

The “no” vote would give the first-lien lenders replacement notes instead of cash, which Judge Robert Drain said should be subject to higher interest rates. Momentive has built those higher interest rates into its newest plan, but if the judge allows the vote change, the interest fight becomes moot.

Either way, Tuesday should move the silicone and quartz maker closer to final approval on its restructuring proposal, which would cut $3 billion from its balance sheet.

The 70-year-old company, owned by Apollo Global Management, filed for Chapter 11 protection in April as it faced a $60 million interest payment to creditors.

On Tuesday in Camden, N.J., the owner of two clubs inside the shuttered Revel Casino Hotel will fight to remain open.

Idea Boardwalk LLC, which runs the HQ Night Club and HQ Beach Club at the Revel, says the clubs have separate entrances and shouldn’t be closed as Idea scrambles to secure modified liquor licenses and access to a different parking lot for its patrons. The company sued Revel, saying the bankrupt casino shouldn’t be allowed to stop the clubs from operating.

Revel filed its second Chapter 11 case in June and closed its doors earlier this week after it couldn’t find a buyer.

Revel employed 3,187 workers as of June, according to state figures. It was the fourth-highest casino employer in Atlantic City among the 12 casinos at the time.

From the beginning, Revel’s future has been uncertain. Envisioned as a new model for Atlantic City—a luxury resort that could attract a no-smoking crowd with Las Vegas style glitz and entertainment, staffed by mostly nonunion workers—the casino never turned a profit.

Also on Tuesday, two Lehman Brothers Holdings Inc. units will seek permission to invest around $600 million set aside for claims filed by J.P. Morgan Chase & Co. so certain creditors can be paid back soon.

The two units, Lehman Brothers Specialty Finance and Lehman Brothers Commercial Corp., want to invest the money in secured notes that would be issued by Lehman Brothers Holdings. Doing so would allow Lehman Brothers Holdings to distribute at least $560 million more to certain creditors during its next distribution, set for October.

The investments, the Lehman entities say, would “free this excess cash for distribution now for the benefit of creditors without prejudice to any stakeholder.”

The procedural move, in effect, would not affect the dispute with J.P. Morgan, which says it is owed $1.83 billion from the two Lehman entities, LBSF and LBCC.

Lehman’s New York-based holding company officially emerged from Chapter 11 protection in March 2012, but because it has billions in remaining assets and more money to pay back creditors, the bank is expected to exist in some form for years to come. Creditors of the Lehman companies in the Chapter 11 case have received more than $80 million back, with the next distribution set for early October.

-Tom Corrigan contributed to this article.

Write to Joseph Checkler at [email protected]. Follow him on Twitter at @JoeCheckler.