Gibson Brands U.S. Trustee objects to fourth amended Chapter 11 plan

By Caroline Salls

Pittsburgh, Sept. 28 – The U.S. Trustee overseeing Gibson Brands, Inc.’s Chapter 11 case objected Thursday to the company’s proposed fourth amended plan of reorganization, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Acting Region 3 U.S. Trustee Andrew R. Vara said in his objection that the plan “contains impermissible non-consensual releases by third parties.”

The U.S. Trustee some releasing creditors and equityholders may not actually be giving their consent to the releases.

“Silence cannot be deemed consent,” Vara said in the objection. “Thus, creditors who are not entitled to vote on the plan, as well as those who are entitled to vote but do not return ballots, cannot be deemed to have ‘consented.’”

In addition, Vara said the Gibson Brands debtors may not assume executory contracts through the plan that require payment of severance or bonuses to some insiders.

Gibson Brands is a Nashville-based maker of musical instruments and consumer and professional audio. The company filed bankruptcy on May 1 under Chapter 11 case number 18-11025.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.