Multiple parties – including Patriot Shipping, Westchester Fire Insurance and Capital One – filed with the U.S. Bankruptcy Court separate objections to International Shipholding’s Disclosure Statement.
Westchester Fire Insurance asserts, “Westchester opposes the approval of the Debtors’ Plan and Disclosure Statement because, as explained herein, it impermissibly calls for the forced release of claims against non-debtor third parties, and it improperly interferes with the subrogation rights of Westchester. While purporting to require affirmative consent by holders of claims and interests for the proposed releases of non-debtor third parties set forth in the Plain and Disclosure Statement, the Debtors’ proposed ballot includes language that appears to extend application of the releases to all creditors, regardless of whether such creditors consent.”
In addition, “Moreover, the Plan and Disclosure Statement provide that, to the extent any claim against the Debtors’ estates is paid in full or in part by a third party, the claim shall be reduced on a dollar-for-dollar basis. These provisions, if permitted, would impermissibly dispose of Westchester’s subrogation rights. Accordingly, Westchester respectfully urges the Bankruptcy Court to reject the proposed Disclosure Statement.”
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