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Kumtor Gold’s dismissal motion draws objection from creditor Gebre
By Sarah Lizee
Olympia, Wash., July 22 – Kumtor Gold Co. CJSC’s motion seeking to dismiss its Chapter 11 cases drew an objection from creditor Gebre LLC, according to court documents filed with the U.S. Bankruptcy Court for the Southern District of New York.
As previously reported, following a dispute between the debtors’ shareholders and the Kyrgyz Republic, a settlement was negotiated to resolve disputes over control of the debtors.
In connection with the shareholder settlement, the debtors seek to dismiss the Chapter 11 cases.
“After being in these Chapter 11 cases for over a year at the expense of their creditors, the debtors presented a ‘smoke and mirrors’ insider settlement with full-blown insider releases that, if approved, would leave the debtors’ creditors empty-handed,” Gebre said in the court documents.
Gebre said if the cases are dismissed, certain administrative creditors will receive preferential treatment in the form of immediate payment from parent company Centerra Gold Inc., while others receive nothing.
While the debtors will receive $50 million in connection with execution of the global arrangement agreement, no recoveries are proposed for other creditors on account of their claims.
Any remaining assets of the debtors would be “well out of reach” for the remaining creditors as a result of dismissal in connection with the proposed settlement, Gebre said.
A hearing is scheduled for July 27.
Bishkek, Kyrgyzstan-based Kumtor Gold is owned by Toronto-based Centerra Gold, a mining and exploration company. The Chapter 11 case number of Kumtor Gold is 21-11051. It filed bankruptcy on May 31, 2021.
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