China Fishery Group’s ad hoc committee of senior noteholders filed with the U.S. Bankruptcy Court an objection to the Company’s notice of sale of a non-debtor vessel.
The committee asserts, “The Court should not sanction the Chapter 11 Trustee’s proposed sale of the Damanzaihao because the proposed sale violates the Indenture and would provide a windfall to the Chapter 11 Trustee and CFG Peru Singapore’s other stakeholders at the expense of the Senior Noteholders, which are SFR’s only funded debt claim holders. Furthermore, to the extent that the Court does permit the Chapter 11 Trustee to sell the Damanzaihao, the Court should require the Chapter 11 Trustee to cause SFR to hold any resulting cash sale proceeds in a segregated account for the benefit of the Senior Noteholders, pending further order of the Court.”
In addition, “The Chapter 11 Trustee has not demonstrated the ability or the intention to repay SFR any funds transferred to CFG Peru Singapore on account of the Damanzaihao sale. (defining fraudulent transfers as including transfers where ‘the debtor would incur debts that would be beyond the debtor’s ability to pay’). To the extent that the Chapter 11 Trustee seeks to transfer the Damanzaihao sale proceeds to CFG Peru Singapore pursuant to the Financing Order or otherwise, the Court should not sanction such value leakage and should instead require any such proceeds to be held in a segregated account for the benefit of the Senior Noteholders.”
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