ECOtality trustee seeks denial of plan based on third-party releases

By Kali Hays

New York, Dec, 8 – ECOtality North America Chapter 11 trustee Ilene J. Lashinsky opposed confirmation of the company’s proposed joint plan of reorganization in an objection filed Dec. 5 with the U.S. Bankruptcy Court for the District of Arizona.

Lashinsky claims that the plan provides “releases and exculpation of non-debtors which do not appear to benefit the estate,” and that the neither the plan nor disclosure statement “provides justification for these provisions.”

“Should the plan be confirmed in its present form, the group of individuals and entities who will enjoy exculpation is simply enormous,” the objection stated.

The plan releases all parties associated with ECOtality’s reorganization, including buyer Blink Acquisition LLC and all professionals associated with it, from all liability, claims, causes of action or any lawsuit that may be filed against them.

According to the trustee, these releases are contrary to Bankruptcy Code standard, which “unequivocally precludes bankruptcy courts of discharging the liabilities of non-debtors.”

Unless the provisions on exculpation are stricken from the plan, Lashinsky asked the court to deny confirmation of the plan.

A hearing to consider confirmation of the plan is set for Dec. 19.

ECOtality, a renewable energy company based in San Francisco, filed for bankruptcy on Sept. 16, 2013. The Chapter 11 case number is 13-16126.

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