BJ Squared filed with the U.S. Bankruptcy Court an objection to Grandparents.com’s Amended Chapter 11 Plan of Liquidation and motion to compromise controversy with VB Funding.
The objection asserts, “Although the Debtors claim that VB Funding dealt with the Debtors at arm’s length, it should be kept in mind that VB Funding owns approximately 45% of the Debtors’ equity, was and remains the Debtors’ principal creditor and, without putting up any cash, has purchased the Debtors’ principal assets other than the to-be-asserted liability claims. The Debtors have proposed a Plan and settlement with VB Funding that may provide VB Funding the immunity it desires, while circulating a Disclosure Statement and motion to compromise that are devoid of discussion of any directors and officers or lender liability claims other than a statement that they intend to bring directors and officers claims and a conclusion that they no claims against VB Funding.”
In addition, “The Objectors object to the exculpation, release and injunction provided by the Plan and the Proposed Order in favor of the VB Parties, which may adversely affect claims that the Objectors may have against the VB Parties for indemnity and/or contribution against the claims that they anticipate will be brought against them, as well as the extent to which the Plan and the Proposed Order may limit the Objectors’ ability to defend themselves against those claims. Further, the Objectors object to the Plan’s broad, unqualified definition use of the term ‘Creditor,’ which Debtors appear to be attempting to incorporate into the Proposed Order. The Objectors are creditors of debtor Grandparents.com. The Plan’s definition and use of ‘Creditor’ are objectionable to the extent that it can be claimed that the definition and use of that term adversely affects rights that do not arise in the Objectors’ capacities as creditors.”
Read more bankruptcy news.