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April 17, 2008 |
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TRICOM SA: Banco Multiple Leon Wants Bankruptcy Plan Revised Banco Multiple Leon, S.A., objects to the confirmation of Tricom SA and its debtor-affiliates' Prepackaged Joint Chapter 11 Plan of Reorganization, and the approval of the disclosure statement explaining the Joint Plan. Banco Leon is a holder of a general unsecured claim against Tricom, S.A., having acquired lender's rights to loans made to Tricom for US$22,000,000. John Drucker, Esq., at Cole Schotz Meisel Forman & Leonard, P.A., in New York, tells the U.S. Bankruptcy Court for the Southern District of New York that the Reorganization Plan and the Disclosure Statement does not provide adequate disclosure, particularly about Banco Leon's liquidated claim, and how it will be treated under the Plan. Mr. Drucker says that Banco Leon is concerned that its claim will be treated as an unimpaired general unsecured claim in Class 7. He adds that the Debtor did not solicit a vote from Banco Leon, an admission that the claim is to be treated as unimpaired. "The treatment of Banco Leon's claim as unimpaired Class 7 claim raises serious doubt as to the [reorganization] plan's feasibility," Mr. Drucker asserts. In the Disclosure Statement, the Debtors project that on or about the anticipated effective date of the Reorganization Plan, they will have cash of about US$10,000,000. According to Mr. Drucker, there is no chance the Debtors can demonstrate that the Reorganization Plan is feasible, when the cash needed to satisfy their commitment to Banco Leon is more than twice the amount available to the Debtors. He further says that it becomes more difficult to understand how the Reorganization Plan can be confirmed if the claims of Bancredit Cayman Limited and Bancredito (Panama), S.A., are taken into account. Bancredit Cayman seeks to recover US$120,000,000, while Bancredito Panama asserts claim for US$70,000,000. Mr. Drucker says that if the claim of Banco Leon is treated as a general unsecured claim, the reorganization plan cannot be confirmed. "On the other hand, if the Debtors characterize Banco Leon's claim as impaired claim, the Debtors' deliberate failure to solicit Banco Leon should bar confirmation," he points out. According to Mr. Drucker, the Court should direct the Debtors to: (a) discuss the nature of the claims of the affiliated creditors, when and how they came to be creditors, the claim amount, and the specific distributions they will receive; (b) explain why the Debtors have limited information about their dominant stakeholder that appointed their management; (c) disclose further the amount of the loans being borrowed from GFN International Investments Corp. banking subsidiaries before 2004, the reasons for borrowing the loans, among others; (d) make available the report of the Special Committee, which was appointed to investigate the US$70,000,000 purchase of Tricom's Class A stock; and (e) further disclose the basis for, or effect of the provision of the Reorganization Plan that provides for a continuing commitment by the Debtors to indemnify and hold harmless its current and former officers and directors. Banco Leon asserts that in the event the Court approves the Disclosure Statement or confirms the Reorganization Plan, the Plan should not enjoin or release any claim or right the bank has against a nondebtor. About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. (Tricom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) |
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