Exco Resources: U.S. Trustee objects to reorganization plan releases

By Caroline Salls

Pittsburgh, June 4 – The U.S. Trustee overseeing Exco Resources, Inc.’s Chapter 11 case objected to proposed confirmation of the company’s revised third amended plan of reorganization, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

Acting Region 7 U.S. Trustee Henry G. Hobbs Jr. said in his objection that releases included in the plan “are not supported by consideration, agreement or specific action” by or for some of released or releasing parties.

In addition, Hobbs said the releases “do not support a valid settlement under the Bankruptcy Code because they lack independent consideration.

The U.S. Trustee also said the plan improperly releases claims arising from gross negligence, intentional misconduct and fraud.

As a result, Hobbs said the plan in unconfirmable.

The plan confirmation hearing is scheduled for June 10.

Exco is a Dallas-based oil and gas exploration and production company operating in Texas, North Louisiana and Appalachia. The company filed for bankruptcy on Jan. 15, 2018 under Chapter 11 case number 18-30155.

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