SPV lenders and factoring counterparties, along with the US Trustee in First Brands’ Chapter 11 cases, have escalated attacks on the debtors’ proposed liquidating plan this week, arguing that the company’s unprecedented “global settlement” structure unfairly penalizes objecting creditors, strips estates of valuable colorable claims and deprives parties of sufficient time to evaluate the proposal.
A series of objections filed in the US Bankruptcy Court for the Southern District of Texas on 18 and 19 May contend that the debtors’ revised disclosure statement and confirmation timeline violate basic bankruptcy protections and due process rights, while several parties argue that the proposed plan is patently unconfirmable.
The objections, filed by the US Trustee, Leucadia Asset Management, Katsumi Servicing, Onset Financial, Keystone Automotive and Uni-Select, and the Carnaby secured lenders, focus heavily on the debtors’ attempt to confirm a Chapter 11 plan for a single debtor entity, Premier Marketing Group, while simultaneously implementing a broader “global settlement” affecting 112 jointly administered debtors.
