The United States, on behalf of the United States Department of the Interior, filed with the U.S. Bankruptcy Court an objection to Black Elk Energy Offshore Operations’ Second Amended Plan of Liquidation.
The objection explains, “The Plan as currently proposed does not comply with the applicable provisions of the Bankruptcy Code and violates applicable law because it seeks to grant non-consensual exculpation and releases to non-debtor parties in violation of 11 U.S.C. section 524(e). The United States does not consent to any such exculpation and release. Through the Release Provision, the Plan would exculpate and release the Debtor, the Creditors Committee, the Indenture Trustee, the Holders of Senior Notes, the Initial DIP Lender, the DIP Agent, Montco and any of their respective members, officers, directors, employees, advisors, professionals, independent contractors or agents (collectively, the ‘Exculpation and Released Parties’) from liability for any act or omission in connection with their acts during the bankruptcy case including, among other things, in connection with formulating or negotiating the Plan or any sale, except in the case of willful misconduct or gross negligence.”
The objection continues, “In addition, the Plan, the Liquidating Trust Agreement and the Litigation Trust Agreement would improperly exculpate and release the two post-confirmation litigation trusts from any claims, causes of action or other liability that may be imposed on them in discharging their duties except for willful misconduct, gross negligence, bad faith, self-dealing, breach of fiduciary duties or ultra vires acts.” Read more oil & gas bankruptcy news.
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