Gorham Paper’s Chapter 11 plan draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Oct. 5 – Gorham Paper and Tissue, LLC’s Chapter 11 plan of liquidation and disclosure statement drew an objection Monday from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Vara said the proposed opt-out mechanism is insufficient to demonstrate creditors’ consent to the broad, third-party non-debtor releases.

The U.S. trustee also said the exculpation provision in the plan is overly broad because it includes non-estate fiduciaries and is not limited to the proper temporal scope.

Vara added that the disclosures within the plan are inadequate for solicitation because the projected amounts of allowed claims in each class are not disclosed.

Gorham, N.H.-based Gorham Paper and Tissue manufactures towel and tissue rolls for at-home and away-from-home markets. The company filed bankruptcy on Nov. 4, 2020 under Chapter 11 case number 20-12814.

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