Waypoint Leasing Holdings – Adjourns Disclosure Statement Hearing as Suntrust Files Late Objections and Concerns Arise as to Plan Confirmability

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May 15, 2019 – The Debtors notified the Court that the hearing scheduled to approve the Debtors' Disclosure Statement had been adjourned from May 16, 2019 until May 30, 2019 [Docket No. 775]. The last minute, and not insubstantial, delay follows on the filing of an objection by SunTrust Bank (“SunTrust” as administrative agent in respect of the Amended and Restated Credit Agreement dated as of April 28, 2017) subsequently joined by a steering committee of prepetition lenders [Docket Nos. 757 and 761, respectively]. The objection takes issue with (i) the Disclosure Statement's release and exculpation language and (ii) the appointment of William Transier (recently of Sears Holdings independent director fame) as Plan Administrator (arguing that he is an insider given his June 2018 appointment to the Debtors' board).

The objection stated, "The WAC7 Administrative Agent files this Limited Objection to bring to the Court’s attention two significant issues it has identified with the Proposed Disclosure Statement and Proposed Plan. First, the Proposed Plan includes broad releases and exculpations of claims between non-debtor third-parties without any justification or support in the Proposed Disclosure Statement or elsewhere. Second, the Debtors propose to appoint an insider of the Debtors, William Transier, as Plan Administrator to liquidate remaining assets and claims without any oversight by creditor constituencies or any reporting requirements. The WAC7 Administrative Agent has raised these and several other issues it has identified with the Proposed Plan and Disclosure Statement with the Debtors and has engaged in conversations with the Debtors to in an attempt to work though these issues. The WAC7 Administrative Agent files this limited objection and reservation of rights to apprise the Court of these serious issues in the event the Court wishes to address them at the disclosure statement approval stage."

The steering committee's joinder adds, "As currently drafted, however, the Steering Committee does not believe the proposed Plan would be accepted by the requisite number of creditors necessary to achieve confirmation under Section 1129 of the Bankruptcy Code. While the Steering Committee is hopeful that an agreement will be reached, it is nonetheless compelled to join in the Objection while negotiations remain ongoing."

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