The U.S. Trustee assigned to the Pacific WebWorks case filed with the U.S. Bankruptcy Court an objection to the Debtor’s Disclosure Statement.
The objection explains, “The Disclosure Statement should set forth the bonding requirements for the Liquidating Trustee and the successor to the Liquidating Trustee. If no bonding is anticipated, the risks and costs of the failure to bond should be clearly set forth in both the Disclosure Statement and the Plan. The Disclosure Statement appears to defer to paragraph 11.4 of the Plan for information concerning Default under the Plan. The provisions are overly vague as how Creditors, the Court, or the United States Trustee are to determine when an event of default occurs.”
The objection continues, “More specific mile stones for performance by the Liquidating Trustee should be provided. Further, it is not clear that in the event of default whether the Court could order conversion of the case to a case under chapter 7 of the Bankruptcy Code. The Disclosure Statement should indicate that if the Case is converted to a case under chapter 7 the current assets will re-vest in the chapter 7 estate. This provision could be included in both the Disclosure Statement, at paragraph 2.5.2, and the Plan, at paragraph 5.2.”
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