A company that distributed films such as "Major League" and "Ace Ventura" was cleared to exit bankruptcy yesterday after a bankruptcy judge criticized a federal official for being too devoted to legal doctrine in trying to block the move, Reuters reported yesterday. Bankruptcy Judge Shelley Chapman approved the settlement under which bankrupt Inverness Distribution Ltd. will repay $36 million to lender Societe Generale and about $1.1 million to unions, including the Writers Guild of America and the Screen Actors Guild. Inverness, founded in 2003 to distribute the foreign rights of producer James G. Robinson's Morgan Creek Productions, filed for bankruptcy in 2011 after defaulting on a loan, sold its portfolio last year, and is using the proceeds to repay debts. The settlement drew an objection from the U.S. Trustee because bankruptcy cases do not typically end until all creditors have voted on a formal restructuring plan. The trustee argued the Inverness plan sought to avoid that approval by incorporating a case dismissal into the settlement itself. The trustee called the plan "sub rosa," a rarely invoked legal doctrine translated as "under the rose," denoting attempts at such evasion. Inverness argued there were no creditors eligible to vote who were not already subject to the settlement, so a formal plan was pointless. At the hearing, Judge Chapman said that she found the trustee's reliance on doctrine, even when efficiency seems to suggest another path, "very, very disturbing."
