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Starry Group disclosure statement draws objection from committee
By Sarah Lizee
Olympia, Wash., March 23 – Starry Group Holdings, Inc.’s disclosure statement for its Chapter 11 plan drew an objection from the official committee of unsecured creditors, according to documents filed with the U.S. Bankruptcy Court for the District of Delaware.
The committee, formed three weeks ago, said it has not been given basic information about the proposed plan and disclosure statement.
“The debtors entered Chapter 11 with a restructuring support agreement outlining the terms of a plan of reorganization negotiated with and for the benefit of the prepetition lenders, with no participation from unsecured creditors,” the group said in its objection.
“Under this one-sided arrangement, unsecured creditors are slated to receive de minimis recoveries that are subject to accepting the proposed plan and granting third-party releases to the debtors, the prepetition lenders, and various other related parties.”
The committee also said the plan is not confirmable because it includes overly broad releases, as well as a “death trap” that threatens to strip unsecured creditors of any distributions if they do noy consent to the plan and agree to release their own direct claims against third parties.
The group also said the plan is not feasible because, following confirmation, the debtors’ own financial projections show that they will continue to suffer from the liquidity issues that plagued them before bankruptcy.
“Given the foregoing, if the court were to permit the solicitation of the flawed proposed plan, its deficiencies could not be remedied prior to confirmation without requiring resolicitation,” the committee said.
The disclosure statement hearing is scheduled for March 31.
Starry is a Boston-based internet service provider. The company filed bankruptcy on Feb. 20 under Chapter 11 case number 23-10219.
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