According to the U.S. Bankruptcy Court docket, Travis County filed an objection to confirmation of American Apparel’s Plan of Reorganization. The objection asserts, “Travis County objects to the Plan because it fails to specifically provide interest on deferred claim payments pursuant to 11 U.S.C. section 1129(a)(9)(D) and 11 U.S.C. section 511. The statutory rate of interest pursuant to Texas tax law is 12% per annum. The Plan should state that any deferred payment on Travis County’s tax claim will accrue interest at the rate of 12% per annum. Travis County objects to the Plan because it fails to specify the start date for payments and the frequency of payments to be made on Travis County’s claim. Travis County submits that the start date for payments should be the Effective Date and the frequency of payments should be at least quarterly. Travis County objects to the Plan because it provides in Plan Paragraph III M; that all liens will be released upon confirmation.”
The objection continues, “The Plan should provide for retention of Travis County’s tax lien. Travis County objects to the Plan because there are no remedies provided to Travis County in the event of default in payment of Travis County’s claim. The Plan should be amended to provide that a failure of the reorganized Debtor to make timely payments to Travis County shall be an event of default, after which Travis County will be entitled to proceed to collect the full unpaid balance of its claim according to Texas tax law.”
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