US Trustee Slams Releases In Graceway Ch. 11 Plan

Law360, Wilmington (April 5, 2012, 5:32 PM EDT) -- The U.S. trustee on Tuesday blasted the release provisions in Graceway Pharmaceuticals Inc.’s Chapter 11 liquidation plan, saying the liability protections are overly broad and impermissibly bind creditors without their consent.

In an objection to the plan lodged in Delaware bankruptcy court, U.S. Trustee Roberta DeAngelis took aim at releases shielding a host of nondebtor parties from creditor claims — including Graceway’s officers and directors, members of the unsecured creditors committee, the trustee overseeing the company’s liquidation and certain lenders, among others.

These third-party releases run...
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