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American Standard Energy Objection Filed

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Creditor XOG Operating filed with the U.S. Bankruptcy Court an objection to American Standard Energy’s Disclosure Statement for Joint Plan of Reorganization.

XOG Operating asserts, “Debtors have utterly failed to provide ‘adequate information’ as required under 11 U.S.C. sections 1125. Instead, Debtors have boldly prepared a Plan and Disclosure Statement that transfers all of the assets to the Prepetition Lenders, along with an agreement to pay the lenders an additional $5 million, while wiping out the claims of all unsecured creditors for a nominal sum. Not only does the Disclosure Statement contain very little actual information about Debtors’ assets and the liabilities that need to be satisfied under the Plan, several pieces of the information that actually is presented are false, in an attempt to mislead creditors into believing that acceptance of the Plan is the only alternative. If presented with an accurate view of Debtors’ background and the potential claims that could be asserted against the Prepetition Lenders, creditors are likely to realize that conversion of this case to Chapter 7 would present an opportunity for a higher return on their claims. Therefore, the Court should not approve the Disclosure Statement; instead, the Court should convert the case to Chapter 7, so that an independent fiduciary can investigate the improper actions of the Prepetition Lenders.”

Read more on the American Standard Energy bankruptcy.

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