SEC Balks At Broad Releases In Emerge Energy Ch. 11 Plan
Law360 (August 26, 2019, 5:10 PM EDT) -- The U.S. Securities and Exchange Commission objected to the proposed Chapter 11 plan of frac sand miner Emerge Energy Services LP on Saturday, saying releases included in the plan would absolve nondebtors of liability and are impermissible under the bankruptcy code.
In the objection, the agency said the releases could negatively impact the existing equity holders of Emerge Energy by releasing potential claims against nondebtor affiliates for any conduct that occurred before and during the bankruptcy case.
“Such releases have special significance for public investors … because they may enable nondebtors to benefit from a debtor’s bankruptcy by obtaining their own...
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