Melinta's Ch. 11 Exculpation Runs To Plan Date, Court Rules
Law360 (April 3, 2020, 6:02 PM EDT) -- A Delaware bankruptcy judge ruled Friday that the exculpation provisions in the Chapter 11 plan of antibiotic maker Melinta Therapeutics only apply until the court-approved plan becomes effective, limiting the length of the provision that was requested by the debtor.
During a hearing conducted via telephone, U.S. Bankruptcy Judge Laurie Selber Silverstein agreed with the Office of the United States Trustee that exculpation only applies to entities with a fiduciary duty to the debtor’s estate and its creditors and that relationship terminates once the plan becomes effective.
“The definition in the plan of exculpated parties is relevant because the debtors, the...
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