Protocol Services unsecured creditors object to plan

By Caroline Salls

Pittsburgh, Dec. 20 - Protocol Services, Inc.'s official committee of unsecured creditors objected to the company's fifth amended plan of reorganization, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of California.

According to the objection, the plan attempts a substantive consolidation of the company's bankruptcy estates without meeting the requirements for the consolidation that say the company has to explain the affect the consolidation would have for creditors.

The committee also said the plan is not fair in its treatment of unsecured and trade creditors.

In particular, the committee said the plan provides no analysis of the company's enterprise value, "which is clearly the center of the issue with regard to whether the plan properly classifies and treats claims."

In addition, the committee said it is likely that the plan was negotiated to protect the interests of "the unsecured lenders that control [Protocol's] board," the mezzanine B noteholders, and therefore was not submitted in good faith.

A plan confirmation hearing is scheduled for Thursday.

Protocol, a Deerfield, Ill.-based integrated direct marketing company, filed for bankruptcy July 26. Its Chapter 11 case number is 05-06782.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.