Teligent disclosure statement draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., April 25 – Teligent, Inc. and its official committee of unsecured creditors’ disclosure statement for a Chapter 11 plan drew an objection from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

Vara said the disclosure statement shouldn’t be approved because it fails to provide adequate disclosure, and because the plan is unconfirmable in its present form.

The U.S. trustee said the disclosure statement does not provide adequate information as to who will be stripped of their direct claims against non-debtors through the third-party release provisions, who will be the beneficiaries of such releases, or what claims are being released.

“Among other failures, the disclosure statement does nothing to clarify the plan’s baffling series of interlocking terms and definitions related to the third-party releases, including a definition of releasing parties that includes the released parties as well as 21 categories of persons and entities that are related to the released parties,” Vara said in the objection.

The U.S. trustee also said the debtors seek no mechanism by which to obtain the affirmative consent of the general unsecured creditors, who are anticipated to receive a distribution of only 11%, to waive their direct claims against non-debtors.

In addition, the opt-out mechanism on the ballot that is proposed by the debtors is meaningless to unimpaired parties, as well as to the parties being forced to grant releases to non-debtors through application of the related-parties clause, Vara said.

A hearing on the disclosure statement is scheduled for April 27.

Teligent is a Buena, N.J.-based specialty generic pharmaceutical company. The company filed bankruptcy on Oct. 14, 2021 under Chapter 11 case number 21-11332.

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