Texas Comptroller of Public Accounts (Comptroller) and Texas Workforce Commissions (TWC) filed with the U.S. Bankruptcy Court an objection to SunEdison’s First Amended Joint Prepackaged Chapter 11 Plan.
The objection asserts, “The Comptroller and the TWC object to attempts in the Plan… to restrict and permanently enjoin the Comptroller or the TWC from asserting any setoff rights. Although the Bankruptcy Code does not establish a right of setoff, section 553 is widely recognized as preserving any right to setoff under applicable non-bankruptcy law. Setoff rights and all aspects of a particular right of setoff, including the waiver of such a right, are determined by non-bankruptcy law.”
In addition, “Counsel for Debtors has indicated that Section 11.8 of the Plan excludes the Comptroller and the TWC from any restrictions or injunctions to setoff rights found elsewhere in the Plan. While the Comptroller and TWC have requested this and other issues be clearly addressed in the confirmation order, the parties have not yet reached an agreement.”
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