Latam Airlines trustee says plan confirmation should be denied

Chicago, May 4 – Latam Airlines Group, SA has had a second objection to its sixth revised joint plan of reorganization from U.S. Trustee for Region 2, William K. Harrington, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The trustee recommends denying the plan.

He says that the debtors improperly engaged in a post-petition claims resolution process for the purposes of leveraging the claims resolution process in order to improperly solicit votes for the plan of reorganization.

The solicitation was a clear violation of section 1125(b) of the bankruptcy code.

Excluding class 5, the usual remedy for such an action, would reward the debtors for their misconduct.

The most appropriate solution, he says, would be to deny confirmation of the plan.

Latam Airlines is a Santiago, Chile-based airline. The company filed bankruptcy on May 25, 2020 under Chapter 11 case number 20-11254.

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