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Memorandum Opinion And Order signed on 11/22/2023 On Confirmation Of Small Business Plan Of Reorganization Under Chapter 11. (related document (s) 55, 90, 63, 85, 84) File: 314456_115_opinion.pdf. Judge: Judge John P. Mastando III. Date:
Nov 27, 2023 · The Bankruptcy Court of the Southern District of New York recommended confirming the reorganization plan for Hal Luftig Company, Inc. (the "Company" for short).
In In re Hal Luftig Co., the Bankruptcy Court recommended confirmation of a subchapter V small business reorganization plan that provided for the nonconsensual release of a non-debtor third party5. The Bankruptcy Court applied the Purdue III factors when considering the release6.
Thus, with respect to nonconsensual third party releases, the Hal Luftig Co. District Court drew a line in the sand in favor of creditor protections over subchapter V’s goal of streamlining reorganization for small business debtors.
In this small business case, the Bankruptcy Court has recommended approval a plan of reorganization that contains a nonconsensual release of a non-debtor. For the following reasons, that recommendation is rejected.
Pending before the Court is the request of Debtor Hal Luftig Company, Inc. (the “ Debtor ”) to confirm the Debtor’s Small Business Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (Docket No. 55)
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Dec 2, 2023 · The Plan. The debtor filed a chapter 11 plan to discharge the debtor’s debt owing to the investor and give the owner a release from liability on the $2.9 million arbitration award. In return, the plan called for the owner to supply $600,000 toward payments under the plan.
