The U.S. Trustee assigned to the Global Brokerage case filed with the U.S. Bankruptcy Court an objection to the Company’s Prepackaged Plan of Reorganization and related Disclosure Statement.
The Trustee asserts, “First, the Debtor has not established that certain broad releases given by the Debtor under the Plan, and which greatly benefit the non-debtor affiliates, are fair and equitable. Second, the Debtor has not established that certain exculpation provisions and third-party releases comply with established Second Circuit precedent. Third, the Plan provides for the priority payment of certain professionals that have not been retained in accordance with the Bankruptcy Code. Fourth, the Plan provides for the assumption of an employment agreement with the Debtor’s chief executive officer that contains a retentive bonus without satisfying the requirements of 11 U.S.C. section 503(c).”
Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago on behalf of the Policemen’s Annuity and Benefit Fund of Chicago also filed with the Court a Plan/Disclosure Statement objection. The Board asserts, “The Disclosure Statement makes no mention of the Fund Class Action. However, based upon the nature of the Fund’s Claim, it appears to be classified as a Class 6 Claim. And although the Debtor has estimated that the amount of all Class 6 Allowed Claims are $0.00, because the Disclosure Statement makes no mention of the Fund Class Action, it is not possible to determine whether the Debtor’s estimate includes the Fund’s Claim. Because neither the Fund Class Action nor the Fund’s Claim are identified in the Plan and Disclosure Statement, and to otherwise address the concerns of the Fund, the Fund seeks certain clarification language, set forth in paragraph 22 below, be included in any confirmation order.”
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