4th Circ. Nixes Release Approvals In Charity's Ch. 11

Law360, New York (December 12, 2011, 7:16 PM EST) -- The Fourth Circuit on Friday ruled that a Virginia federal court erred in affirming National Heritage Foundation Inc.'s reorganization plan, saying a bankruptcy court had not justified its approval of provisions releasing certain third parties from liability.

The nondebtor release, injunction and exculpation provisions in question prevented potential claimants from asserting claims against the NHF and certain officers and directors, as well as the official committee of unsecured creditors. Plaintiffs-appellants and former NHF donors John R. Behrmann and Nancy Behrmann challenged the reorganization plan, but U.S....
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