AmTrust disclosure statement approved; plan hearing set for Oct. 25

By Lisa Kerner

Charlotte, N.C., Sept. 16 - AmTrust Financial Corp.'s disclosure statement related to its amended plan of reorganization was approved, according to a Friday filing by the U.S. Bankruptcy Court for the Northern District of Ohio.

The Bancorp and Holdco objections were overruled, the Wilmington response was resolved and a comment by the Federal Deposit Insurance Corp. was noted, the filing said.

The plan confirmation hearing is set for Oct. 25.

As previously reported, AmTrust filed an amended plan in July that changed the proposed treatment of the FDIC's capital claims.

Specifically, under the amended plan, if the FDIC's claim is allowed by final order, other than the plan confirmation order, it will receive substantially all distributions of available cash until paid in full.

The FDIC's claim was also switched to impaired status from unimpaired under the amended plan.

Creditor treatment

Treatment of creditors under the amended plan would include the following:

• Holders of administrative expense claims, priority tax claims, other priority claims and convenience claims will be paid in full in cash;

• The rights of holders of secured TIF claims, intercompany claims and equity interests will remain unaltered;

• Holders of secured bondholder claims will receive all of the collateral securing their claims, subject to the satisfaction of the claims in connection with the expected sale of a parking garage;

• Holders of other secured claims will either be paid in full in cash, receive the proceeds of the sale of the collateral securing their claims, have their claims cured and reinstated or their rights will remain unaltered;

• If the FDIC's claim is ultimately allowed, it will receive substantially all distributions of available cash until paid in full; and

• Holders of other unsecured claims will receive a share of amounts distributable under the plan.

AmTrust Financial is the Cleveland-based holding company for AmTrust Bank. The company filed for bankruptcy on Nov. 30, 2009. Its Chapter 11 case number is 09-21323.

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