Stoneway Capital Chapter 11 plan draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., April 25 – Stoneway Capital Ltd.’s Chapter 11 plan drew an objection on Monday from Region 2 U.S. trustee William K. Harrington, according to court documents filed with the U.S. Bankruptcy Court for the Southern District of New York.

Harrington said the plan impermissibly imposes third-party releases on parties who have not affirmatively and unambiguously demonstrated their consent to grant the releases.

“The debtors are relying in part on the notion that the relief they are seeking is typical and ordinary, and that the third party-releases in the plan are consensual,” the U.S. trustee said in his objection.

“However, the debtors have not procured appropriate consent from all parties subject to the releases in the plan. Moreover, absent such consent, the bankruptcy code does not authorize third-party releases.”

Harrington also said the debtors have not shown that the releases are permissible under any test.

The plan confirmation hearing is scheduled for May 5.

Stoneway is a privately held New Brunswick, Canada, company based in Buenos Aires and established in 2016 for the purpose of constructing, owning and operating power plants to provide electricity to the wholesale electricity market in Argentina through indirect subsidiaries. The company filed bankruptcy on April 7, 2021 under Chapter 11 case number 21-10646.

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