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LATAM Airlines Group S.A. – Files Third Revised Plan of Reorganization and Disclosure Statement as Sparring Continues with Deeply Opposed Creditors’ Committee Over Disclosure Statement Language

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January 27, 2022 – The Debtors filed a Third Revised Plan of Reorganization and a related Disclosure Statement with each attaching blacklines (changed pages only) showing changes to the versions filed on January 24, 2022 [Docket Nos. 4189 and 4190, respectively].

The majority of the amendments relate to continued sparring amongst the Debtors' official committee of unsecured creditors (the "Committee"), deeply opposed to multiple aspects of the Plan and otherwise looking to have the Debtors' exclusive Plan filing right terminated so that it might file its own competing Plan, and the Debtors.

The amended Plan documents were filed just in advance of a hearing to consider adequacy of the Disclosure Statement (beginning at 2pm EST on January 27th); with that hearing also set to cover Plan exclusivity and a prodigious list of objections/objectors (and responses thereto from the Debtors and pro-debtor stakeholders) to both the Disclosure Statement and the Debtors' requested exclusivity extensions. 

The Committee has had some sucess in highlighting and front-loading its emotive arguments of a Plan hijacked by the Debtors' first-class creditors at the expense of general unsecureds who are actually footing the bill for premium returns; with the Committee beefing up its early-in-the-Disclosure Statement (beginning on page 5) version of events and peppering stakeholders with both hefty numbers and reminders that, should they turn out to vote in sufficient numbers, the little guys actually stand a chance under Section 1126(c)'s "two-thirds in a dollar amount and more than one-half in number" thresholds. 

For their part the Debtors continue to put on a brave face that they already have the requisite numbers (at least as to amount), but even here the Committee has had some sucess in getting the Debtors to walk back their attaempts to cast Plan voting as a fait accompli. The revised Disclosure Statement now providing:

Often the willingness of a debtor to give a plan opponent full access to a Disclosure Statement is a sign of confidence that the votes are indeed in the bag; here, however, inter alia, the qualifying references as to "in amount" and the added disclosure as to the 57.73% (amount) for the "High Claims Estimate," conveys a sense that the Plan as drafted is not fully in the bag.

Back to the Committee's emotive Disclosure Statement arguments, beginning on p5 just after the Deftors' Plan summary. 

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The post LATAM Airlines Group S.A. – Files Third Revised Plan of Reorganization and Disclosure Statement as Sparring Continues with Deeply Opposed Creditors’ Committee Over Disclosure Statement Language appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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