US Trustee Protests Syms' Ch. 11 Plan Over CEO Protections

Law360, Wilmington (August 24, 2012, 9:42 PM EDT) -- The U.S. trustee objected Friday to Syms Corp.'s proposed Chapter 11 reorganization, arguing the discount clothing retailer's plan cannot be confirmed in Delaware bankruptcy court as it provides legal cover for nonfiduciary parties, namely CEO Marcy Syms and her professionals.

The proposed plan would reorganize Syms and subsidiary Filene’s Basement LLC as a real estate holding company, but the trustee claims it “is not confirmable because it contains an exculpation provision that is contrary to applicable law in this district.”

Such provisions provide post-petition protection and...
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