Patriot National’s former directors Austin Shanfelter, James O’Brien, Michael Purcell and Jeffrey Rohr jointly filed with the U.S. Bankruptcy Court an objection to Patriot National’s Third Amended Joint Plan of Reorganization.
The objection asserts, “The Former Directors are defendants or potential defendants in actual and threatened litigation relating to the services they provided to one or more of the Debtors. The Former Directors were non-management directors. They each filed claims against the Debtors, including contingent and unliquidated claims for, among other things, advancement, contribution and/or indemnification.”
In addition, “They also have potential direct claims against third parties, including other directors and officers of the Debtors, as well as the Debtors’ primary lender and beneficiary under the Third Amended Plan, Cerberus Business Finance, LLC and its affiliates or related entities (collectively, ‘Cerberus’), as well as a number of affirmative defenses. The Third Amended Plan provides for a release in favor of Cerberus and exculpation of the Debtors’ current officers and directors. The release and exculpation language is ambiguous and overbroad. In addition, the Plan provides for an injunction that appears to place restrictions on the ability of the Former Directors to defend themselves in litigation brought against them.”
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