Judge Strikes Down Nellson Settlement

Law360, New York (March 13, 2007, 12:00 AM EDT) -- A federal bankruptcy judge on Tuesday took a U.S. Trustee’s advice and rejected a settlement between Nellson Nutraceutical Inc.’s second-lien lenders and its controlling shareholder, Fremont Capital Partners LLP, that would have inched the company one step closer to exiting Chapter 11.

Judge Christopher S. Sontchi of the U.S. Bankruptcy Court in Delaware turned down the deal one day after a hearing on the matter. According to Nellson, a diet food maker, the settlement would have sped its exit from bankruptcy.

However, U.S. Trustee Kelly Beaudin...
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