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Metromedia creditors say statement is 'littered with vague assertions'
By Caroline Salls
Pittsburgh, Feb. 8 - Metromedia International Group, Inc.'s official committee of unsecured creditors objected to the disclosure statement for the company's plan of reorganization, arguing that the statement is "incomplete and littered with vague assertions that are unsupported by the record in this case," according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.
The committee also said the plan was not proposed in good faith.
According to the objection, the company's proposed changes to the plan are not significant, indicating that Metromedia has made no real progress toward plan confirmation.
"The court should deny approval of the disclosure statement and order the debtor to provide clear disclosures of facts with attributions to reliable sources where appropriate," the committee said in the objection.
In addition, the committee said the plan is unconfirmable because it classified similarly situated unsecured creditors separately without any reasonable basis and discriminates among similarly situated creditors.
Specifically, the committee said the plan "rests on two dubious premises that call into question whether [Metromedia] should be permitted to solicit this plan," including the separate classification of the company's former chief executive officer, whose claim is being classified as secured even though his security interest was never perfected before the bankruptcy filing, and change-of-control provisions that impair the reorganized company's ability to make plan payments.
The disclosure statement hearing is scheduled for Friday.
Metromedia is a Charlotte, N.C., communications company that filed for bankruptcy on June 18, 2009. Its Chapter 11 case was filed under the name MIG, Inc., case number 09-12118.
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