Saturday, December 13, 2014

U.S. Trustee's Objection to Dendreon Plan Support Agreement in Chapter 11 Case $DNDN

"The Proposed Plan Support Agreements were negotiated with a handful of unsecured creditors to the apparent exclusion of the remaining creditor body. The Plan Support Agreements contain provisions which have been rejected by other bankruptcy courts, including the specific performance provisions, and provisions beyond the Debtors’ control which nevertheless put the Debtors in breach of the Agreements, and the inappropriate provisions regarding the payment of professional fees.

These are not Plan Support Agreements negotiated between a Debtor and secured debt where secured status entitles an oversecured creditor to professional fees as adequate protection and where providing a secured lender with the ability to be a Qualified Bidder or the right to credit bid is part of the basic package of rights a secured lender typically requests. These are not Plan Support Agreements negotiated pre or post-petition amongst all constituencies designed to achieve a consensual resolution of the Debtors’ financial affairs. These are Plan Support Agreements entered into between the Debtors’ and a handful of unsecured creditors which have the effect of dictating the course of these proceedings, pays professional fees when there is no underlying legal obligation to do so and which also act to circumvent provisions of the Bankruptcy Code professional expenses without oversight or control.

The Plan Support Agreements are not designed to resolve this Debtors’ financial affairs. They are designed to favor a small group of creditors at the expense and exclusion of all others. The Plan Support Agreements are not necessary to permit the Debtor to seek a sale of its assets. The Debtor can take this course of action without the agreements that tie its hands into a predetermined course of action."

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