Bankruptcy Court Releases of Tort Claims Against Non-debtors – Where and When Are Releases Pro
In Chrysler, the Official Committee Of Unsecured Creditors has filed a “limited objection to the efforts of the debtors to obtain their release of all potential tort and other claims against managers and others related to old Chrysler. The objection is Docket number 3991 on the Chrysler bankruptcy website and also is available here. The gist of the objection is that it is premature to release such claims until at least a hurried investigation has been conducted. The hearing on this issue apparently will occur tomorrow, June 18.
In other chapter 11 cases, the US Trustee’s office in NY has recently objected to releasing non debtor parties when they have not made an extraordinary contribution to the bankruptcy estate, as I learned yesterday from reading LAW360 on bankruptcy. The objection was asserted in the Charter One bankruptcy, and is available here.