Katerra: Bankruptcy court rejects Greensill’s stay relief attempt

By Sarah Lizee

Olympia, Wash., Oct. 8 – The court overseeing Katerra, Inc.’s Chapter 11 bankruptcy case denied a motion from Greensill Ltd. seeking relief from the automatic stay, according to an order filed Thursday.

Greensill sought the relief from the U.S. Bankruptcy Court for the Southern District of Texas to pursue $440 million in claims against Katerra in an English court.

The official committee of unsecured creditors had objected to the motion, as previously reported.

“If granted, the Greensill Motion would significantly delay distributions and thereby impose an indefinite stay on payment of distributions to creditors while simultaneously preventing creditors, as well as the committee and any future plan administrator, from participating in proceedings concerning Greensill’s $440 million claims in each of the debtors’ estates,” the committee said in its objection.

“Suspending distribution payments indefinitely will both erase the benefits achieved though the debtors’ and this court’s efforts to move toward plan confirmation and further damage the estates’ creditors in the form of delayed payments and lost rights to be heard.”

Until Greensill’s disputed claims are resolved, it is unlikely creditors will receive any distributions from the debtors’ estates. In addition, if Greensill’s claims are allowed, those claims would eliminate or significantly diminish recoveries for creditors.

The committee said that allowing Greensill to liquidate its claim in England would allow it to “hold the estates’ 1,000-plus creditors hostage” until late in the year 2024 or beyond.

“This is disproportionate and unfair,” the committee said. “Delaying distributions would cause real-world hardship to the estates’ creditors that otherwise could receive distributions in the nine to 15 months following confirmation.”

Katerra is a technology-enabled construction company based in Menlo Park, Calif. The company filed bankruptcy on June 6 under Chapter 11 case number 21-31861.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.