Sixth Circuit Might Rule on Deductions for Contributions to Retirement Accounts
Courts are split on whether chapter 13 debtors may deduct voluntary contributions to retirement accounts from ‘disposable income.’
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California Wildfire Victims Lawyer Calls PG&E Plan 'Totally Unacceptable'
PG&E Corp.’s plan to cap payments to victims of California wildfires blamed on the power producer is “totally unacceptable,” a lawyer representing victims in the utility’s bankruptcy case said yesterday, Reuters reported. San Francisco-based PG&E unveiled on Monday a proposed plan to exit bankruptcy that included payments capped at $8.4 billion for wildfire claims. The plan forces fire victims and government entities to seek compensation from the same fund, which will dilute payouts for everyone, said Cecily Dumas, a BakerHostetler lawyer who represents the official committee of tort claimants in PG&E’s bankruptcy. State investigators have blamed PG&E transmission lines with causing wildfires in 2017 and 2018 including the Camp Fire that killed 85 people. Dumas said that government agencies such as the Department of the Interior and the Federal Emergency Management Agency, or FEMA, could have billions of dollars in claims, leaving far less for victims than $8.4 billion. At the same time, PG&E said that it intends to pay other unsecured creditors such as noteholders in full in cash when its plan goes into effect next year. “That’s unfair,” said Dumas.
Another Judge Clamps Down on Third-Party Releases in a Major Reorganization
Extinguishing contingent environmental claims doesn’t comply with the Sixth Circuit’s Dow Corning test, Judge Koschik says.
Judge Name - Do not use it.
Bankruptcy Judge Alan M. Koschik, Bankruptcy Judge Michael E. Wiles
Section 363 Doesn’t Apply to Asset Sales in a Chapter 11 Plan, Judge Garrity Rules
Section 363(o) claims nonetheless must be counted in deciding whether a chapter 11 plan passes the best interests test.
Aegerion Creditors Approve Drugmaker’s Chapter 11 Plan
Creditors of Aegerion Pharmaceuticals Inc. have approved a bankruptcy plan that hands the cholesterol drugmaker’s business to Dublin-based Amryt Pharma PLC, WSJ Pro Bankruptcy reported. Creditors voted overwhelmingly to support the drugmaker’s chapter 11 plan, according to a Thursday filing in U.S. Bankruptcy Court in New York. Bankruptcy Judge Martin Glenn set a confirmation hearing on the plan for Sept. 5. Aegerion, maker of the drug Juxtapid, filed for bankruptcy in May with a deal to recapitalize about $414 million in outstanding debt and deliver the business to Amryt. Aegerion, which is owned by Novelion Therapeutics Inc., has continued to make Juxtapid and its other drug, Myalept, available to patients while in chapter 11 and continue paying ordinary business expenses. Under the plan, Aegerion creditors would own 61.4 percent of Amryt’s common stock once the merger closes, while Amryt would raise $60 million in new equity financing. Novelion’s loan to Aegerion, the parent’s principal asset, would also be converted into stock.
Absolute Priority Doesn’t Require an Individual Debtor to Pay for Exempt Property
BAP holds that an individual in chapter 11 isn’t required to contribute new value to retain exempt property.
Judge Name - Do not use it.
Robert J. Faris