U.S. Trustee objects to Dynegy plan, questions compliance of releases

By Caroline Salls

Pittsburgh, Aug. 27 - Dynegy Inc. and Dynegy Holdings, LLC's joint plan of reorganization drew an objection Monday from Region 2 U.S. Trustee Tracy Hope Davis, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

Davis said the plan calls for broad non-debtor third-party releases, injunctions and exculpation provisions that the Dynegy debtors have not proven comply with Second Circuit law or the Bankruptcy Code.

Until compliance is proven, the U.S. Trustee said the court should not confirm the proposed plan.

The plan confirmation hearing is scheduled for Sept. 5.

Dynegy filed bankruptcy on July 6 in the U.S. Bankruptcy Court for the Southern District of New York. Dynegy Holdings and four subsidiaries filed for bankruptcy on Nov. 7, 2011 under case number 11-38111.

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