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Dakota Plains Holdings Bankruptcy Objection Filed

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The U.S. Trustee assigned to the Dakota Plains Holdings case filed with the U.S. Bankruptcy Court an objection to the Company’s Disclosure Statement.

The Trustee asserts, “The information to be included in the Plan Supplement is necessary for creditors to intelligently vote on the plan. Providing that information, a mere ten days before confirmation deprives creditors of needed information and the disclosure statement should include that information and those documents prior to being approved by the court….Similarly, proposed disclosure statement does not contain adequate information because it does not include a liquidation analysis.”

In addition, “The disclosure statement and plan appear to have inconsistent (or at least confusing) treatment in the claims in Class 3 (WFS Entities) and Class 4 (general unsecured creditors). In Class 3, it is stated that WFS will be allowed its $15 million claim which will be treated as an unsecured claim in Class 4….Unsecured trade creditors should not be required to look to another document to see how or if their treatment in Class 4 is different than that of WFS, particularly if the pay-out to WFS in Class 4 is more favorable….Accordingly, the disclosure statement should be modified to include the carve-out figure. The plan and disclosure statement, in the treatment of unclassified administrative expense claims should include an estimate of the dollar amount of such claims….The plan cannot be confirmed and the disclosure statement cannot be approved because they make no provisions for the payment of U.S. Trustee fees due and owing under 28 U.S.C. section 1930(a)(6).”

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