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Constellation Enterprises Agreement Approval Sought

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Constellation Enterprises’ official committee of unsecured creditors filed with the U.S. Bankruptcy Court a motion for entry of an order approving a liquidating trust agreement and binding claims mediation agreements.

The motion explains, “The Settlement Motion seeks approval of a settlement term sheet (the ‘Term Sheet’)…which, among other things, requires the establishment by the Committee and the Debtors of a liquidating trust (the ‘GUC Trust’) with beneficial interests in the GUC Trust inuring solely to the Beneficiaries. The following assets will be transferred to the GUC Trust (a) certain claims and causes of action, and (b) cash contributions from the Purchaser, consisting of (i) $1,250,000 for general unsecured creditor recoveries and (ii) $1,000,000 for GUC Trust professional fees, ((a) and (b), collectively, the ‘Liquidating Trust Assets’), which Liquidating Trust Assets will be used to administer the GUC Trust and facilitate distributions to holders of allowed general unsecured claims (‘Allowed General Unsecured Claims’) and to the Noteholder Beneficiaries. The GUC Trust will be administered by a liquidating trustee (the ‘Trustee’) and a Liquidating Trust Oversight Committee…whose actions will be governed by the Liquidating Trust Agreement.”

In addition, “Accordingly, by this Motion, the Committee seeks an order approving, among other things, the form of the Liquidating Trust Agreement… The Dismissal Motion does not provide any reconciliation or dispute resolution procedures for determining the validity and amount of the claims filed against the Debtors in these cases. Indeed, to date the Debtors have not served a bar date notice, which was authorized by this Court by order dated July 19, 2016 [D.I. 396]. By this Motion, the Committee requests that the Court enter an order providing, among other things, that any holder of a general unsecured claim, in order to receive its pro rata share of distributions from funds held by the GUC Trust, must agree to participate in and be bound by certain claims-resolutions procedures.” The Court scheduled a December 20, 2016 hearing on the motion, with objections due by December 13, 2016.

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