Residential Capital LLC’s disclosure statement for its reorganization was opposed by the U.S. Trustee, Bloomberg News reported yesterday. The U.S. Trustee said in a court filing yesterday that the statement doesn’t adequately describe the plan. Also, provisions of the plan contained in the disclosure statement include impermissible payments for the reimbursement of legal expenses of certain creditors, the trustee said. Unless the provisions at issue are removed, the plan “is not confirmable and neither the plan nor the disclosure statement may be approved,” the filing said. Last month, the bankrupt mortgage company filed a reorganization plan estimating unsecured creditors will recover about 36 percent of what they are owed, while debts backed by collateral will be paid in full.
