GSE creditors ask court to move statement hearing to after bar date

By Caroline Salls

Pittsburgh, May 27 - GSE Environmental, Inc.'s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Delaware to continue the June 11 hearing on approval of the company's disclosure statement, according to a Tuesday court filing.

The committee said GSE's Chapter 11 case involves an attempt to deliver all of the GSE debtors' equity to pre-bankruptcy lenders, who acquired their debt just before the bankruptcy filing.

The creditor group said delivery of that equity to the lenders may provide them with more than a full recovery on their secured debt at the expense of unsecured creditors.

"The debtors seek to avoid scrutiny by agreeing to short milestones that are designed to obtain confirmation of a Chapter 11 plan that unfairly limits and cuts off certain unsecured claims notwithstanding the going concern value of the debtors or their substantial unencumbered interest in their foreign affiliates," the motion said.

"The proposed disclosure statement veils the debtors' plot by setting forth generalities bereft of any factual support."

The committee said GSE is looking to establish a bar date for unsecured claims that is after the disclosure statement hearing "to avoid potential exposure of the fact that class 5 creditors may receive less than a 100% distribution under the proposed Chapter 11 plan."

According to the motion, a post-disclosure statement approval bar date "is inappropriate in these cases where the disclosure statement is void of meaningful information regarding the amount of class 5 claims and the value of unencumbered assets available for distribution to unsecured creditors, and where the debtors propose a $1 million cap for class 5 unsecured creditors but anticipate (without confidence) that such cap provides a 100% recovery."

The committee said the disclosure statement hearing should be continued until after the bar date so there is enough information regarding the amount of class 5 claims.

The committee has requested a June 2 hearing on the continuance motion.

GSE, a Houston-based plastics company, filed bankruptcy on May 4. The Chapter 11 case number is 14-11126.

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