A federal bankruptcy judge will conduct a hearing Wednesday to consider whether to grant Building Materials Holding Corp.'s (BMHC) request to approve key parts of its reorganization plan or instead honor creditors' request for at least one more month's time to review a plan introduced just days ago.

The creditors' prickly worded request to Judge Kevin Carey to delay until at least Nov. 19 any decision on the BMHC proposals indicates BMHC will be hard-pressed to achieve of its goal of emerging from Chapter 11 bankruptcy-law protection from creditors by the end of the year. Indeed, when Carey granted a motion Monday to hear the creditors' complaint, he also signed orders extending until Jan. 12 the deadline for BMHC to assume or reject unexpired leases of nonresidential real property.

BMHC, the No. 6 dealer on this year's ProSales 100 with total sales in 2008 of $1.3 billion, filed for Chapter 11 protection in Wilmington, Del., on June 16.

The Chapter 11 reorganization process requires the company involved to file, and get approved by a judge, a disclosure statement detailing its financial situation and what it intended to do about it as well as a document explaining how it will solicit approval by debholders of the company's reorganization plan. In BMHC's case, the creditors said, BMHC issued a disclosure statement on June 16, amended it on July 27, and then amended it again on Oct. 1. (See latest version.)

Oct. 1 also was the day BMHC announced that a group of lenders led by Wells Fargo has committed at least $83.5 million and possibly $103.5 million in financing. At the same time, it filed an amended reorganization plan that provides for BMHC's secured lenders to convert debt into equity, becoming majority owners of the company upon emergence. Current shares will be extinguished and thus current shareholders have lost all their investments. BMHC anticipates that, under its reorganization plan, the prepetition lenders (principally Wells Fargo) would recover 72.4% of what they put into BMHC, while general unsecured claimants would get back only 13.1%--and that would occur only if they approved the reorganization agreement; otherwise, they could get nothing.

"The [Creditors] Committee opposes the debtors' efforts to ram through this "amended" (i.e., completely new and different) disclosure statement and revised Solicitation Procedures Motion," the motion by the creditors read. "The debtors' decision to file the Second Amended Disclosure Statement and Second Amended Plan three business days before the Disclosure Statement Hearing does not comport with notions of fair play and justice."

Consequently, "the Committee seeks a continuance of these two (2) matters until Nov. 19, 2009, the next scheduled omnibus hearing date, so that the Committee, and all of its constituents not privy to the settlement negotiations that gave rise to the Second Amended Disclosure Statement and Second Amended Plan, have a meaningful opportunity to review and digest their contents."