September 2, 2021 – With their Plan confirmation hearing underway, the Debtors have now filed a Fifth Amended Chapter 11 Plan which attaches a redline showing changes to the version filed on August 27, 2021 [Docket No. 2557]. Also attached is a revised proposed confirmation order and a revised resolution chart (each with a blackline). The revised Plan and supporting documents reflect the Debtors continued efforts to chip away at outstanding objections and resolve several specific claims and/or cure amounts. The only objection apparently still unresolved is that of the U.S. Trustee on the issue of quarterly fees.
On August 31st, the U.S. Trustee for Regions Three and Nine lobbed in a last-minute objection (which parallels a largely identical objection he filed in the CL H Winddown LLC (f/k/a CarbonLite Holdings LLC) cases, same Court but different judge) and which argues that "The Plan cannot be confirmed because Plan § II(D) violates 28 U.S.C. § 1930(a)(6). Specifically, Plan § II(D) appears to exclude all post-confirmation distributions or expenditures made by the Litigation Trusts from the 'disbursements' made in the case for purposes of calculating the statutorily-mandated fee that must be paid in the Debtors’ cases every quarter" [Docket No. 2554 with Debtors' reply at Docket No. 2569]
In their aggressive reply, the Debtors reject the U.S. Trustees' “second bite at the apple” and cite the Paragon case (same court) where Judge Sontchi stated: "I cannot stress enough how offensive I find the OUST's attempt to double, or triple collect its ‘tax.’ [the quarterly fees on disbursements]…What is reprehensible is attempting to take money out of the pockets of creditors, which are already receiving a small recovery on their claims, multiple times for the
On September 1st, Judge Drain, who punctuated his marathon Purdue Plan confirmation hearings with pointed barbs aimed at the U.S. Trusteed assigned to those cases (using his anger as a caffeine-like pick-me-up whenever his energy understandably waned), advised the U.S. Trustee that: "sometimes being a watchdog that has no regulatory power requires backing off…this is one of those instances." It will be interesting to see what Judge Goldblatt (who had these cases transferred to him by Sontchi) has to say about this last-minute intervention.
Fortunately for both sets of debtors (who have their Plan confirmation hearings ongoing simultaneously) this issue is likely to be resolved one way or another shortly.
The hearing continues today, September 3rd.
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The post MTE Holdings LLC – Files Fifth Amended Plan Reflecting Resolution of Claims/Objections; Last Minute Objection of U.S. Trustee as to Quarterly Fees Still to be Resolved appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.