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USA Discounters U.S. Trustee objects to plan’s ‘overbroad’ exculpation
By Angela McDaniels
Tacoma, Wash., Feb. 13 – USA Discounters, Ltd.’s U.S. trustee objected to confirmation of the company’s plan of liquidation, according to a Feb. 13 filing with the U.S. Bankruptcy Court for the District of Delaware.
U.S. trustee Andrew Vara said in the filing that the plan’s exculpation provision is “overbroad and thus impermissible,” making the plan not confirmable.
The plan provides exculpation to the debtors, the creditors committee, the pre-petition agent, the pre-petition lenders and each of the preceding’s respective related parties.
Vara said the list of parties receiving exculpation should be limited to those parties that acted in the capacity of estate fiduciaries, i.e., the creditors committee, its members, estate professionals and the company’s directors and officers.
Vara said the exculpation provision is contrary to applicable law in the district and asked the court to issue an order denying confirmation of the plan.
A hearing will be held at 10 a.m. ET on Feb. 27.
As previously reported, the company filed its plan of liquidation and related disclosure statement on Nov. 22.
The company said its remaining assets are largely limited to receivables, cash and trust avoidance actions.
The plan calls for the appointment of a plan administrator and a general unsecured claims trustee who will administer and liquidate all remaining property of the USA Discounters debtors and their estates.
USA Discounters will be dissolved and wound up under the plan.
USA Discounters, a Norfolk, Va.-based retailer, filed for bankruptcy on Aug. 24, 2015. Its Chapter 11 case number is 15-11755.
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