The Securities and Exchange Commission and United States of America filed with the U.S. Bankruptcy Court separate objections to Hercules Offshore’s Joint Prepackaged Chapter 11 Plan.
The SEC asserts, “The release provisions must be deleted from the plan because they are not consensual and do not meet the standard for nonconsensual releases.…Because the Nondebtor Third Party Releases are Not Fair to the Shareholders, Not Necessary to the Reorganization, and Not Supported by the Facts of this Case, they Do Not Meet the Standard for Nonconsensual Releases….In this case, where shareholders as a class rejected the Plan, did not consent to the releases, and are not receiving anything in exchange for the releases apart from what they are entitled to as a class under the Plan, the releases must be stricken or amended not to bind shareholders.”
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