The U.S. Trustee assigned to Digital Domain Media Group case filed with the U.S. Bankruptcy Court a motion to compel the filing of a Chapter 11 Plan, or in the alternative, dismissing or converting the Chapter 11 case.
The Trustee asserts, “The Debtors should file a Chapter 11 Plan within a reasonable period of time, or in the alternative, convert of dismiss these Chapter 11 cases in the interest of justice and for the benefit of creditors who are being prejudiced, among other things, merely due to the passage of time. The Committee’s activities, in prosecuting and liquidating causes of action, could also be easily accomplished through a liquidating trust or by a Chapter 7 trustee. To continue the status quo ignores safeguards that Congress built into the Chapter 11 plan process and is contrary to, inter alia, the purposes of Chapter 11 of the Bankruptcy Code. The U.S. Trustee’s Motion does not exalt mere form over substance. On the contrary, the safeguards Congress placed in Chapters 11 and 7 are substantive statutory requirements. The statutory safeguards embodied in the Bankruptcy Code afford necessary protections to creditors holding unsecured claims.”
The motion continues, “The filing of a Chapter 11 plan and the initiation of the Chapter 11 plan confirmation process will advance these cases and will draw creditors closer to a possible distribution on their claims.” The Court scheduled a May 9, 2016 hearing to consider the motion, with objections due by May 2, 2016. Read more bankruptcy news.
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