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Patriot National Bankruptcy Objection Filed

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Quentin P. Smith, Jr., Charles H. Walsh, Michael J. Corey and Christopher A. Pesch (collectively, the Company’s former directors and officer [Former Ds&O’s]) filed with U.S. Bankruptcy Court an objection to Patriot National’s Second Amended Joint Chapter 11 Plan of Reorganization.

The objection asserts, “The Former Ds&O are defendants in pending litigation stayed by this Court’s mediation order, as well as creditors of the Debtors’ estates. As both defendants and creditors, the Former Ds&O have grave concerns regarding the propriety of the Plan and echo the issues raised by the Committee in its letter urging creditors to reject the Plan. In particular, allegations have been made by various parties regarding the Cerberus Credit Facility and potentially tortious conduct by Cerberus vis-a-vis the Debtors. The deadline to commence an appropriate contested matter or adversary proceeding asserting any challenge claim against Cerberus has not yet passed and the Former Ds&O, along with other parties, are evaluating their options. In the interim, however, the Former Ds&O determined it prudent that they submit their preliminary objection to the Plan.”

In addition, “Under the Plan, the Debtors are proposing to grant broad releases to various parties, including Cerberus, despite serious questions as to whether those parties engaged in wrongdoing in connection with the Cerberus Credit Facility and the Forbearance Agreement. Further investigation of these wrongdoings is warranted to, among other things, evaluate the propriety of the proposed releases. These releases not only will deprive the estates’ creditors of extremely valuable causes of action, but Cerberus may also attempt to use the releases to negate or otherwise negatively impair the claims that Former Ds&O have against Cerberus in connection with the Lawsuits.”

Read more Patriot National bankruptcy news.

The post Patriot National Bankruptcy Objection Filed appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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