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Hermitage Offshore Chapter 11 plan draws objection from U.S. trustee
By Sarah Lizee
Olympia, Wash., May 24 – Hermitage Offshore Services Ltd.’s Chapter 11 plan drew an objection from Region 2 U.S. trustee William K. Harrington, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.
Harrington said the debtors have failed to meet their burden of proof to show that the plan meets the statutory requirements of section 1129 of the bankruptcy code.
First, the debtors, who have liquidated substantially all of their assets and will wind down their affairs, will receive discharges under the plan.
“Section 1141(d)(3) of the bankruptcy code, however, prohibits liquidating debtors from receiving a discharge,” the U.S. trustee said in his objection.
Second, the plan treats class 3 unsecured creditors as unimpaired but does not pay that class post-petition interest.
“Paying a class of unsecured creditors in full, but without post-petition interest, does not result ipso facto in an unimpaired class of creditors,” Harrington said.
“Because unsecured creditors will not receive interest, such creditors are impaired and, therefore, are entitled to vote to accept or reject the plan.”
A combined hearing on the disclosure statement and plan is scheduled for June 23.
Hermitage Offshore is a Hamilton, Bermuda-based offshore support vessel company that owns vessels operating primarily in the North Sea or the West Coast of Africa. The company filed bankruptcy on Aug. 11, 2020 under Chapter 11 case number 20-11850.
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