GB Holdings unsecured creditors object to request for discovery related to litigation claims

By Caroline Salls

Pittsburgh, Feb. 6 - GB Holdings, Inc.'s official committee of unsecured creditors objected to the motion by Carl A. Icahn and his affiliates "renewing their efforts to seek discovery from creditors to prove their purported defenses to prospective fraudulent conveyance litigation by the estate," according to a Friday filing with the U.S. Bankruptcy Court for the District of New Jersey.

According to the objection, now that the company's exclusivity has been terminated, the Icahn affiliates want to exploit the plan of reorganization process to harass creditors into an involuntary settlement of the estate's litigation claims.

The committee said nothing in bankruptcy law allows a potential defendant in estate litigation to conduct pre-litigation discovery, and the Icahn affiliates cite no authority supporting their request.

A hearing on allowing the discovery is scheduled for Feb. 14.

On Jan. 18, GB Holdings' exclusive periods were terminated, and the court ordered competing plans of reorganization be filed by March 20 after the committee objected to the exclusivity extension, saying the company's estate consists of only a minority interest in its subsidiary and the prospective litigation against Icahn and his affiliates.

GB Holdings has no operating activities. It filed for bankruptcy on Sept. 29. Its Chapter 11 case number is 05-42736.

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