Ezra Bankruptcy Settlement Filed


Ezra Holdings filed with the U.S. Bankruptcy Court a motion for approval of a settlement between the Debtor and the plan administrator of certain affiliated Debtors of EMAS Chiyoda Subsea Limited.

The motion explains, “The Debtors assert a number of claims against the ECS Debtors for obligations the Debtors allege are owed from one or more of the ECS Debtors to one or more of the Debtors (the ‘Direct Claims’)….After confirmation of the ECS Plan, the Plan Administrator filed an objection (the ‘Claim Objection’) to allowance of the Guaranty Claims, asserting, among other things, that (a) the filed proofs of claim failed to state claims against the ECS Debtors; (b) because certain Counterparties to the Guaranteed Obligations had not filed claims in Ezra’s chapter 11 cases, those claims could no longer be asserted against Ezra or the ECS Debtors; (c) Ezra had no ability to pay the Guaranteed Obligations in the amount asserted in the proofs of claim; and (d) that such claims should be disallowed as contingent claims for reimbursement under section 502(e)(1)(B) of the Bankruptcy Code. In order to avoid the cost and expense of litigating the Claim Objection, the Debtors and the Plan Administrator negotiated and agreed to resolve the issues set forth in the Claim Objection pursuant to the terms set forth on the settlement agreement.”

In addition, “Guaranty Claim Cap. $56 million (the ‘Guarantee Claim Cap’) is set as the aggregate cap on Ezra’s remaining Guaranty Claims (the ‘Remaining Ezra Guarantee Claims’)….Ezra, the ECS Debtors, and the Plan Administrator agree that the Guarantee Claim Cap is based, in part, on Ezra’s current estimate with respect to recoveries to unsecured creditors in Ezra’s Chapter 11 bankruptcy cases or otherwise, and that both the Guarantee Claim Cap and the amount of any allowed Remaining Ezra Guarantee Claims may be periodically adjusted downward based on, among other things, decreases to Ezra’s anticipated or actual distribution to unsecured creditors in the Ezra Chapter 11 Cases or otherwise.”

The Court scheduled a January 22, 2018 hearing on the settlement agreement.

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