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U.S. Tobacco creditors denied appointment of official committee
By Sarah Lizee
Olympia, Wash., Oct. 7 – Some of U.S. Tobacco Cooperative Inc.’s unsecured creditors were denied appointment of an official committee, according to an order filed Thursday with the U.S. Bankruptcy Court for the Eastern District of Northern Carolina.
As previously reported, Xcaliber International Ltd., LLC, Tobacco Rag Processors and Schweitzer-Mauduit International, Inc. said they are among the company’s largest unsecured trade creditors and that the interests of unsecured creditors will not be adequately represented without the appointment of an official committee.
“Whether mandatory or permissive, formation of an official committee will provide needed ballast to stabilize these cases amidst the spirited advocacy of other parties and help to ensure that any confirmed plan maximizes recovery for all unsecured creditors,” the group said in its motion.
The group said that six unsecured creditors have volunteered to serve on the committee. But the bankruptcy administrator said at a Sept. 16 hearing that it was not recommending appointment of an official committee of unsecured creditors because four out of the six unsecured trade creditors expressing interest in serving on the committee purportedly had priority claims.
“Although the BA refuses to recommend the appointment of a creditor holding a priority unsecured claim to a committee, there is no legal support for this proposition,” the unsecured creditors said.
Raleigh, N.C.-based U.S. Tobacco is the largest tobacco cooperative in the United States. It filed bankruptcy on July 7, 2021 under Chapter 11 case number 21-01511.
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