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Midway Gold Bankruptcy Objection Filed

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The U.S. Trustee (UST) assigned to the Midway Gold case filed with the U.S. Bankruptcy Court an objection to the Company’s Second Amended Plan of Reorganization.

The objection asserts, “The UST objects to the confirmation of the Debtors’ Plan based upon: A. Misclassification of the Class 3 Subordinate Agent Secured claim as unimpaired and, inferentially, an accepting class; B. More significantly, the improper provisions for the release and exculpation of various persons and, to the extent that such provisions may be permissible at all, the consent to these releases and exculpations being “opt out” rather than “opt in” provisions of the Plan; and C. The Plan provisions for impermissibly broad post-confirmation jurisdiction by the Bankruptcy Court.”

In addition, “The UST asserts that the distinction between “liquidating” and “rehabilitative” plans is appropriate where liquidating plans serve only to distribute the remaining assets and not to preserve some going concern….The releases and exculpations at bar are improper under Tenth Circuit precedent, and do not meet even the minimum threshold for approving such releases under other circuits’ precedents. The Debtors’ plans should not be confirmed unless these provisions are omitted.”

Read more Midway Gold bankruptcy news.