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Clovis: U.S. trustee takes issue with fees under proposed settlement
By Sarah Lizee
Olympia, Wash., June 12 – Clovis Oncology, Inc.’s motion seeking approval of a settlement with the official committee of unsecured creditors and Sixth Street Partners, LLC drew an objection from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to documents filed Monday with the U.S. Bankruptcy Court for the District of Delaware.
Vara said he doesn’t object to the settlement in general but takes issue with the tacking on of the estate’s payment of fees of the informal creditor group and the note trustee to the settlement, which the U.S. trustee says is in circumvention of section 503(b) of the bankruptcy code.
“There is no connection between the settlement and the payment of these fees,” Vara said in his objection.
The U.S. trustee said the justification the movants advance for payment of these fees was already advanced by the debtors at the first-day hearing, before there was a committee and before there was a settlement.
“There is no evidence showing how the ad hoc group and the notes trustee advanced the settlement negotiations, and because the constituencies of these parties are already represented on the committee, it is likely the work performed by their professionals was duplicative of the work performed by the committee and its professionals,” Vara said.
The U.S. trustee also said that while the movants tout the reasonableness of the fees proposed to be paid, those fees have not been disclosed.
Finally, the proposed payment of prepetition fees of the informal creditor group and trustee and the note trustee appears to pose a disparate treatment issue as to other unsecured creditors in these cases, Vara said.
Clovis Oncology is a Boulder, Colo.-based biopharmaceutical company. The company filed bankruptcy on Dec. 11, 2022 under Chapter 11 case number 22-11292.
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