Westchester Surplus Lines Insurance Company, ACE American Insurance Company, Federal Insurance Company and Executive Risk Indemnity (collectively, “Chubb Companies”) filed with the U.S. Bankruptcy Court an objection to Rentech’s Amended Combined Disclosure Statement and Chapter 11 Plan of Reorganization.
The objection asserts, “The Chubb Companies object to the Plan on the grounds, that: (I) while it appears that the Debtors seek to obtain the benefits of the Insurance Programs (see Plan Article XIII.D.), the Plan does not address the fact that in order to do so, the Debtors (or the Rentech Liquidation Trust) must remain liable for the Debtors’ Obligations under the Insurance Programs, regardless of whether such Obligations were incurred before or after the Petition Date; (II) the Debtors cannot alter or otherwise modify the terms of the Insurance Programs through the Plan; (III) the Plan must provide that workers’ compensation claims and direct action claims must continue in the ordinary course of business; and (IV) the third party releases in the Plan are not permitted by the Bankruptcy Code.”
In addition, “Moreover, the Plan contains provisions which provide for the release of claims and other causes of action, the vesting and transfer of assets in the Rentech Liquidation Trust free and clear of liens, releases of certain third-parties, and exculpation and injunctions against certain actions…..The Plan is silent on the Debtors’ continuing obligations under its workers’ compensation programs, and on the treatment of claimants who have a direct right of action against an insurer.”
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