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Ciber Bankruptcy Objection Filed

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Ciber’s official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors’ motion for an order approving the settlement by and among the Debtors and Zayo Group.

The committee asserts, “The proposed Zayo Settlement is not fair, equitable or reasonable. The proposed Zayo settlement relies on the artifice of an overstated asserted claim by Zayo ($37.5 million) to grant Zayo an unreasonably high, class-skewing general unsecured claim ($27.75 million)….The Zayo Settlement should not be approved because it does not meet the Martin factors, it impermissibly dictates terms of the Debtors’ Plan prior to confirmation, does not provide adequate analysis of the released avoidance actions, and is not in the paramount interest of all creditors. This Court is not required to fix the amount of the claim of Zayo to reject the proposed settlement. Instead, the Court can simply determine that the settlement is not a fair, reasonable and equitable resolution of the dispute.”

In addition, “The Debtors’ Settlement Motion concedes that there are reasonable arguments that Zayo’s asserted claims are overstated. The argument that such a penalty provision requires extensive litigation is misplaced….The undeniable fact that the Debtors settled on the Zayo claim barely two weeks after Zayo’s rejection damages claim was filed indicates that the Debtors never fully examined the options as a fiduciary should….The proposed settlement, as intended in the Debtors’ Plan, would pay Zayo the roughly $10 million of hard costs Zayo invested while leaving Zayo in full control of those assets. Truly an example of Zayo having its ‘cake’ and ‘eating it, too.’ The Debtors’ estates recover nothing for that proposed expenditure….Zayo’s claim is overstated because it also fails to discount the damages to a present value as of the termination date.”

Read more Ciber bankruptcy news.

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