Nellson Trustee Asks Court To Reject Settlement

Law360, New York (February 27, 2007, 12:00 AM EST) -- The U.S. Trustee charged with overseeing Nellson Nutraceutical Inc.’s Chapter 11 proceedings has asked a bankruptcy court to reject a proposed settlement deal between the bankrupt diet food maker’s second-lien lenders and its controlling shareholder.

In an objection submitted Monday, U.S. Trustee Kelly Beaudin Stapleton blasted the agreement, noting that the court had previously found that Fremont Capital Partners LLP, which holds almost 95% of Nellson’s shares, had tried to artificially inflate Nellson’s value in order to bolster the worth of Fremont’s own holdings.

The court...
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