THOMAS J. CATLIOTA, Bankruptcy Judge.
Debtor Neogenix Oncology, Inc. ("Neogenix" or the "Debtor"), with the support of the Official Committee of Equity Security Holders (the "Committee"), seeks confirmation of its plan of liquidation. Judy A. Robbins, the United States Trustee ("UST"), objects to confirmation. The court previously ruled that the Debtor established all elements for confirmation under 11 U.S.C. § 1129(a)
The court has subject matter jurisdiction over approval of the confirmation of the plan pursuant to 28 U.S.C. §§ 157 and 1334. The confirmation of a chapter 11 plan is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(L).
Neogenix is a Maryland corporation founded in 2003 as a biotechnology company that developed therapeutic and diagnostic products in the early detection and treatment of cancer. At the time it filed its petition on July 23, 2012, Neogenix was in the pre-revenue stage; it generated funds almost exclusively from grants and the sale of its common stock, rather than from product sales or operations.
In 2011, Neogenix's management team learned that prior management and prior counsel had authorized Neogenix to pay finders' fees to unlicensed or unregistered individuals who raised capital for Neogenix. In October 2011, Neogenix received a letter of inquiry from the U.S. Securities and Exchange Commission.
Neogenix determined that, due to the practice of payment of finders' fees, some investors may have the right to seek to rescind their stock purchases and require Neogenix to return their investment. Neogenix's management assessed this risk and determined that it is "reasonably possible" that some shareholders may have rescission rights. As of July 10, 2012, the range of potential liability for rescission was approximately $0 to $31 million. In fact, Neogenix received several shareholder claims for rescission totaling an estimated $1.4 million. However, no rescission litigation against Neogenix has been initiated.
The potential rescission liability jeopardized Neogenix's on-going business because of the possibility that it might need to rescind stock purchases or pay damages. It also had a chilling effect on Neogenix's ability to raise capital. Neogenix appointed a committee to consider available financial alternatives. By March 2012, Neogenix hired Piper Jaffray & Co., to investigate its options to raise capital, or alternatively, search for a buyer. Piper Jaffray conducted a prepetition marketing process and contacted fifty-nine potentially interested parties, but only one party, Precision Biologics, Inc. ("PB") submitted a bid for Neogenix's operating assets. PB is a corporation that was formed specifically to purchase Neogenix's assets, and it was initially owned and managed by Stanley B. Archibald, Jr., who is a shareholder of Neogenix and was also a former Neogenix board member.
PB and Neogenix commenced negotiating a potential sale of Neogenix's assets in May 2012. The sale of Neogenix's assets to PB was intended to, among other things, provide Neogenix shareholders with an ownership stake in the success of its medical technology.
Neogenix and PB entered into a nonbinding letter of intent in June 2012, and then negotiated the terms of an Asset Purchase Agreement, a bridge loan, and a debtor-in-possession financing facility. An ad hoc committee of Neogenix's seven largest shareholders, who were not involved in Neogenix's management and were not owners of PB, helped review and evaluate the proposed purchase. Neogenix continued to consult with the ad hoc committee about the sale to PB and about the bankruptcy filing through the petition date.
Neogenix filed for chapter 11 relief on July 23, 2012. On August 7, 2012, the U.S. Trustee appointed seven Neogenix shareholders to serve on the Committee. Two members of the Committee were members of the ad hoc committee, which was disbanded after the Committee was appointed. The Committee retained the law firm of Sands Anderson to serve as its counsel.
The court approved Neogenix's bid procedures for sale of its assets by an order entered on August 21, 2012. Piper Jaffray re-contacted the original fifty-nine bidders that were identified pre-petition, along with twenty others. Other than PB, there was only one other interested bidder. However, that other interested bidder declined to submit a qualifying bid.
Thus, PB was deemed to be the successful bidder. After notice and a hearing, the court entered a final order approving the sale to PB on September 20, 2013, and the sale closed on September 24, 2012. PB paid Neogenix $3,965,000.00, minus a credit of $1,172,525.37 (representing a payoff of the DIP financing facility) for all of Neogenix's assets. The remaining $2,792,474.63 went to Neogenix, and PB issued Neogenix 5.5 million shares of PB stock (the "PB Stock") to be distributed pro rata to Neogenix's shareholders pursuant to a confirmed plan. Contingent cash, in the amount of $730,000, was also lent to Neogenix, pursuant to the terms of the APA. The only assets that Neogenix maintained were its potential causes of action.
Since the filing of the case, Neogenix's directors have not been paid any compensation and officers have not received any compensation after the sale closed to PB.
Neogenix, in consultation with the Committee, developed a chapter 11 plan of liquidation. Ultimately, Neogenix filed an amended disclosure statement, which was approved by the court, and the First Amended Plan of Liquidation (the "Plan"). Docket Nos. 280-81. The court held a confirmation hearing on May 3, 2013, at which it concluded that all elements of § 1129(a) were met for confirmation other than the two issues discussed herein. The parties subsequently filed post-hearing briefs on the two outstanding issues described above.
The Plan provides full payment of unsecured claims and a significant distribution to interest holders. Under the Plan, the PB Stock, which has been held in a liquidating trust since the sale closed, will be distributed to the equity holders shortly after the effective date, and any causes of action will be transferred to the liquidating trust, with the net proceeds from successful causes of action also transferred to Neogenix's shareholders. The Plan also
Specifically, the Plan authorizes the full payment of allowed administrative claims and allowed priority tax claims. Secured claims, non-tax priority claims, and general unsecured claims, comprising Classes 1, 2, and 4 respectively, will be paid in full, and are deemed unimpaired and to have accepted the Plan. See § 1126(f). The only class of claims that did not receive nor retain any property is Class 6, holders of unexercised stock options.
The voting and impaired classes consist of Classes 3 and 5. Class 3 consists of thirteen former and current directors and officers, each of whom timely filed a proof of claim for contingent, unliquidated, and unsecured claims for indemnification.
Class 5 consists of "Interests in the Debtor for shares of the Debtor's Common Stock owned by any Shareholder, including Potential Shareholder Rescission Claims." Plan at 27; Am. Discl. at 51. Shareholder, as defined in the Plan, means a holder of the Debtor's common stock.
Mr. Christopher Hyun, a member of the Committee, testified
To address the officer and director claims and the resolution of the indemnity provisions, the Committee conducted an analysis and investigation of the potential causes of action against officers and directors and others. This due diligence commenced with the submission of document and information requests to Neogenix and its professionals. Specifically, the Committee reviewed all the Board of Director's minutes from inception and the applicable insurance policies, as well as the term, coverage, scope, and limits of those policies. In its examination, the Committee learned that Neogenix's liability was spread out through a tower of insurance policies and through tail coverage. The Committee interviewed corporate and bankruptcy counsel. It also looked into the roles of previous board members, audit
The Committee concluded that certain former officers and directors, and others, face liability for the problems faced by Neogenix. Claims against those parties are preserved in the Plan. The Committee, however, concluded that providing a third party release to the thirteen members of Class 3 was warranted based on its investigation and would greatly facilitate the distribution of the PB Stock and remaining assets to the equity holders.
The third party release and exculpation provisions in the Plan are contained in Article 10. As pertinent here, Article 10.C.3. contains a third party release of the Class 3 members for all acts or omissions prior to the effective date by the Class 5 members (the "Release Provision").
The Committee endorses the Plan. It also sent the Class 5 members a letter in support of the Plan, stating as follows:
Official Committee's Plan Support Letter, March 21, 2013 (Docket No. 310-1).
All thirteen members of Class 3 voted to accept the Plan. Class 5 voted overwhelmingly to accept the Plan. Specifically, 261 of the 273 voting Class 5 members, 95.60% of the voting members, voted in favor of the Plan. Further, according to the tally of ballots, 13,687,227 of the 13,743,560 voting shares (or 99.59%) voted to accept the Plan and 56,333 of 13,743,560 voting shares (or.41%) voted to reject the Plan. No Class 5 member filed an objection to the Plan or objects to the Release and Exculpation Provisions. No party, including the UST, has asserted that valuable claims exist against the Class 3 members.
As stated earlier, the UST objects to the Plan on two grounds: the Plan fails to meet the requirements of § 1129(a)(10) and the Plan cannot be confirmed with the Release and Exculpation Provisions. The UST files her objection pursuant to her statutory obligation to supervise the administration of chapter 11 cases including, in particular, filing comments on plans and disclosure statements. 28 U.S.C. § 586(a)(3)(B). The court will address each issue in turn.
Section 1129 sets forth the substantive requirements for confirmation of a chapter 11 plan. One requirement is that, if any class is impaired, an impaired class of creditors must vote to accept the plan, without including the votes of insiders:
11 U.S.C. § 1129(a)(10). Here, Class 3 is the only class of impaired claims entitled to vote on the Plan. All members of Class 3 voted in favor of confirmation. The UST contends, however, that all Class 3 members are insiders because the determination of whether a class member is an insider should be made when the claim arose, and all Class 3 members were officers or directors at that time. The Debtor contends that the relevant period for determining when a Class 3 member is an insider is at the time the Plan was developed or voting occurred, and further contends that four members were not insiders at those times.
The Bankruptcy Code provides a non-exhaustive definition of the term "insider." 11 U.S.C. § 101(31). See Butler v. David Shaw Inc., 72 F.3d 437, 443 (4th Cir.1996). Where the person or entity does not fit within one of the statutorily listed categories, the inquiry becomes fact intensive, and the insider determination hinges on the closeness of the relationship between the parties and whether their dealings are at arm's length. In re Three Flint Hill Ltd. P'ship, 213 B.R. 292, 298 (D.Md.1997). Ultimately, "an insider may be any person or entity whose relationship with the debtor is sufficiently close so as to subject the relationship to careful scrutiny." Butler, 72 F.3d at 443.
In re Public Access Technology.com, Inc., 307 B.R. 500, 505-06 (E.D.Va.2004). Thus, there is no question that those Class 3 members that were officers or directors when they voted in favor of the Plan were insiders, and no further inquiry is required as to them.
Four members of Class 3 were no longer officers or directors when the case was filed or when voting occurred.
Section 1129(a)(10) requires that an impaired class has accepted the plan, without including "any acceptance of the plan by an insider." 11 U.S.C. § 1129(a)(10). Acceptance of the plan is governed by § 1126. A class of claims accepts the plan if the plan has been accepted by creditors that hold at least two-thirds in amount and more than one-half in number of allowed claims of creditors "that have accepted or
This view is also consistent with the rationale behind § 1129(a)(10). Insider votes are excluded
In re Piece Goods Shops Co., L.P., 188 B.R. 778, 798 (Bankr.M.D.N.C.1995). This rationale does not apply where a vote is cast by a former insider who is no longer sufficiently connected with a debtor to be an insider, and who is therefore motivated only by his or her status as a claimant in the case.
Further, the difficulty with the UST's position is made manifest when one considers an insider who acquires noninsider claims for the purposes of controlling a class of creditors. It seems inconceivable that a court would conclude that an insider's votes on the acquired claims circumvented § 1129(a)(10) because the acquired claims were held by noninsiders when they arose. Thus, the UST's position would require one reading of § 1129(a)(10) for former insiders, and another for current insiders.
A number of courts have held that, for purposes of § 1129(a)(10), the relevant time period for determining insider status with respect to voting on a plan is at the time the vote is cast. See In re MCorp. Fin. Inc., 137 B.R. 219, 232 (Bankr. S.D.Tex.1992) ("[T]he determination of insider status is made at the time the vote is taken, not at the time the claim arises."); In re Featherworks Corp., 25 B.R. 634, 640 (Bankr.E.D.N.Y.1982) ("[T]his Court is persuaded that what determines the right to vote is the status of the creditor at the time the vote is taken, not at the time the debt arises."); In re 455 CPW Assocs., 225 F.3d 645, 2000 WL 1340569 (2d Cir.2000) (unpublished summary order) (finding a vice president of a limited partner of a debtor was not an "insider" at the time he voted on the plan).
In this case, four Class 3 members were no longer directors or officers when the Plan was developed or voting occurred. Therefore, they do not meet the statutory definition of insider in § 103(31)(B)(i) and (ii).
The court turns to the question of whether their "relationship with the debtor is sufficiently close so as to subject the relationship to careful scrutiny." Butler, 72 F.3d at 443. That question can be readily resolved at least with respect to two Class 3 members. Gillian M. Sorensen is a member of Class 3 in her capacity as executor of the estate of Theodore Sorensen. Theodore Sorensen served as a "non-executive" Vice-Chairman of the
The court reaches a similar conclusion for Dennis Greene. He served on the board of directors beginning in December 2009. He has never owned any stock in Neogenix. All of Mr. Greene's Board activities ceased when he resigned from the Board on July 2, 2012. Since that time, he has not attended any Board meeting or any Board committee meeting. Mr. Greene did not participate in the Debtor's decision to file for bankruptcy protection and he had no involvement in either the preparation or prosecution of the bankruptcy case or the formulation of the Plan. Since his resignation from the Board, the Debtor's management has not sought or considered Mr. Greene's opinion or advice on any matter. Accordingly, Mr. Greene ceased being a statutorily defined insider upon his resignation from the Board in July 2012, and the evidence establishes that he is not sufficiently connected with the Debtor to lead to the conclusion that he was an insider when the Plan was developed or voting occurred.
Therefore the court concludes that the Debtor has met the requirements of § 1129(a)(10).
The UST objects to the inclusion of the Release Provision in Article 10. She argues that while there is no per se prohibition against third party release clauses, the Release Provision is not permissible under controlling law as applied to this case. Neogenix and the Committee disagree, and contend that the Release Provision is a narrowly drawn, bargained for resolution of the Class 3 claims that is necessary for Plan confirmation. They contend the Release Provision substantially benefits the releasing parties because it allows the Class 5 members to receive the PB Stock without having to wait for the statute of limitations to run on any claims against the Class 3 members. They contend, therefore, that the Release Provision is allowable under established precedent.
At the core of the parties' dispute is their differing application of the Fourth Circuit's decision in Behrmann v. Nat'l Heritage Found. Inc. (Behrmann), 663 F.3d 704, 712 (4th Cir.2011) (citing Deutsche Bank AG v. Metromedia Fiber Network, Inc. (In re Metromedia Fiber Network, Inc.), 416 F.3d 136, 142 (2d Cir. 2005)). There, the Fourth Circuit considered whether nondebtor releases are allowable in a plan of reorganization. The court first noted its earlier holdings in
The court then turned to the standards a bankruptcy court should apply when considering whether to approve nondebtor releases as part of a chapter 11 plan of reorganization. It held that whether a bankruptcy court "should lend its aid in equity to a Chapter 11 debtor will turn on the particular facts and circumstances of the case...." Behrmann, 663 F.3d at 711. The court commended to the bankruptcy court for consideration the seven factors in Class Five Nev. Claimants v. Dow Corning Corp. (In re Dow Corning), 280 F.3d 648, 658 (6th Cir.2002) and the five factors in Hoge v. Moore (In re Railworks Corp.), 345 B.R. 529, 536 (Bankr.D.Md.2006). Behrmann at 712. The Dow Corning court identified the following factors when analyzing nonconsensual third party releases:
280 F.3d at 658.
The Railworks factors have been summarized as follows:
In re Nat'l Heritage Found., Inc., 478 B.R. 216, 226 (Bankr.E.D.Va.2012) (quoting Behrmann, 663 F.3d at 712). As has been recognized, the Railworks factors are "basically a shortened version" of the Dow Corning factors, id. at 227, and so the court will turn to the Dow Corning factors.
The court finds that there is an identity of interests between Neogenix and the Class 3 members, which arises out of the indemnity agreements between the Debtor, its directors and officers. No party disputes that the Class 3 members hold valid indemnification rights against the Debtor under the Debtor's articles of incorporation, bylaws and applicable state law. In a somewhat different context of considering whether it is appropriate to
A.H. Robins v. Piccinin, 788 F.2d 994, 999 (4th Cir.1986) (quoting GAF Corp. v. Johns-Manville Corp. (In re Johns-Manville Corp.), 26 B.R. 405, 410 (Bankr. S.D.N.Y.1983)). Of course, because officers and directors often have indemnification claims, this factor is only one factor to consider, and cannot be determinative.
Although Class 3 members do not contribute assets to the Debtor under the Plan, they do provide consideration that the Committee has determined to be of sufficient value to support the Release. By accepting the Plan in which they give up their indemnification rights in exchange for the releases, the Class 3 members are allowing the PB Stock to be distributed to the Class 5 interest holders upon Plan confirmation without further confirmation or claim adjudication litigation or other delay. The Committee has determined that this benefit exceeds the value of the Release.
Specifically, all Class 3 members submitted unchallenged affidavits stating that the Release Provision was a material reason they voted for the Plan, and in the absence of the third party releases, they would vote against the Plan. The absolute priority rule ordinarily would prevent the confirmation of a plan in which sales proceeds or other assets are distributed to interest holders over the objection of, and without the acceptance by, a class of creditors. The Debtor and the Committee contend that, without the consent of Class 3, the PB Stock would have to be retained until the statute of limitations runs on any potential third party claims against the Class 3 members or those claims are resolved. Thus, the Committee has determined that the expedient receipt of the PB Stock provides the Class 5 members with a benefit that exceeds the potential value, if any, of retaining claims against the Class 3 members.
The absolute priority rule "provides that a dissenting class of unsecured creditors must be provided for in full before any junior class can receive or retain any property [under a] plan." Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 202, 108 S.Ct. 963, 99 L.Ed.2d 169 (1988) (citations omitted). As pertinent here, the absolute priority rule is codified in § 1129(b)(2)(B)(ii), which provides that unless each claimant in a dissenting unsecured class receives or retains property with a present value equal to the allowed amount of the claim, "the holder of any claim or interest that is junior to the claims of such [unsecured] class will not receive or retain under the plan on account of such junior claim or interest any property...." 11 U.S.C. § 1129(b)(2)(B)(ii). The statutory trigger for the absolute priority rule occurs when a plan meets all of the confirmation requirements of § 1129(a)
The UST contends that the court can confirm the Plan without providing the releases to Class 3 members because the absolute priority rule would not apply to a class made up of insiders. The UST made this argument, which she concedes is novel, when she contended that Class 3 was fully comprised of insiders. The court has now rejected that contention. It is sufficient to say here that nothing in the language of § 1129(a)(8) or § 1129(b)(1) excepts from the reach of the absolute priority rule an impaired non-accepting creditor class merely because it is comprised primarily of insiders.
The court concludes that the absolute priority rule would prevent the Plan from being confirmed if the Class 3 members were to vote against it in the absence of the releases as the case is currently presented. Thus, the Class 3 members' relinquishment of their indemnification rights supports the determination by the Committee that the Class 5 members receive a negotiated benefit under the Plan.
The Plan is a liquidating plan; the Debtor is not reorganizing. All of the Debtor's assets have been sold (other than litigation claims) and the Plan will not affect the operation of those assets or any reorganization effort. Thus, the Release Provision is not essential to the Debtor's reorganization.
Further, the court assumes for purposes of this decision that the only two options available for the resolution of the Class 3 claims are those presented by the parties: either (1) the Class 3 members receive a third party release; or (2) the PB Stock and other assets must be retained by the Debtor until any third party claims against the Class 3 members are resolved or the statute of limitations has run.
Without doubt, the Committee and the Debtor have concluded that such an alternative plan is not the preferred plan. But this point simply emphasizes that what occurs under the Plan is a proposed settlement of the third party claims between Class 3 and Class 5. See In re Washington Mutual, Inc., 442 B.R. 314 (Bankr.D.Del. 2011) (recognizing that a different standard applies for approving a settlement that includes the release of third party claims than for imposing the release on the third parties). Because the release of the third party claims is not necessary for the Debtor's reorganization or for confirmation of a plan, this factor weighs against allowing the Release.
The impacted class, Class 5, voted overwhelmingly to accept the Plan. The determination of whether a class of interests accepts a plan is made by reference to the amount of the allowed interests that vote on the Plan. § 1126(d). By that standard, holders of 99.59% of the amount of the allowed interests that voted have accepted the Plan. No Class 5 member has filed an objection to the Plan. This factor weighs in favor of allowing the Release.
The record establishes that the Committee investigated claims against the Class 3 members and concluded that the Class 5 members are better off by granting third party releases and immediately receiving the PB Stock. Other than that, the record is largely bereft of any discussion of the nature of potential claims against the Class 3 members. And it is not self-evident from the record why the Committee reached its conclusion. For example, it is not clear whether any Class 3 members served during the period that the improper finders' fees were being charged, which gave rise to the rescission claims and the SEC inquiry. The court does not doubt that the Committee and its counsel fulfilled their duties with a full understanding of their responsibilities to the estate and the Class 5 members. The court, however, cannot conclude one way or the other whether the Class 5 members are receiving adequate value for their claims by granting a release in exchange for the immediate receipt of the PB Stock.
It is clear, however, that the Class 5 members were not given an opportunity to choose not to provide a third party release and pursue their claims, other than to vote against the Plan. The Debtor carries substantial officer and director liability insurance. It is not inconceivable that some Class 5 members, if given the chance, might be content to have the PB Stock retained in the liquidating trust and pursue claims against the Class 3 members. Thus Class 5 members were not provided an opportunity to choose not to give a release, and the court cannot conclude that the Class 5 members receive adequate value under the Plan. These factors weigh against allowing the Release.
The Release Provision does not meet the requirements of Behrmann. The Plan is a liquidating plan. The third party releases are not necessary for the Debtor's reorganization or the sale of the Debtor's
In the court's view, this case is more akin to cases that consider whether third party releases should be allowed by consent, rather than to Behrmann-type cases. This is because the primary factors in support of the Release Provisions are the overwhelming vote in favor of the Plan by Class 5 and the lack of objection by a releasing party. It is well recognized that, where the application of the Dow Corning or other applicable factors leads to the conclusion that the third party releases should not be approved, the court can nevertheless approve the releases with the consent of the releasing parties. The rationale for allowing consensual third party releases is that the affected parties are bound by their consensual agreement. See Flake v. Schrader-Bridgeport Intern., Inc., 538 Fed.Appx. 604, 613 (6th Cir.2013) (Section 524 prevents a debtor's discharge from extending to third parties, but parties are free to settle claims.); Food Lion, Inc. v. S.L. Nusbaum Ins. Agency, Inc., 202 F.3d 223, 228 (4th Cir.2000) (Parties are not precluded from settling claims consensually.); In re Arrowmill, 211 B.R. 497, 506 (Bankr.D.N.J.1997) ("When a release of liability of a nondebtor is a consensual provision, however, agreed to by the effected creditor, it is no different from any other settlement or contract and does not implicate 11 U.S.C. § 524(e)."). Courts differ on whether consent to third party releases must be express, such as by accepting the plan or making an affirmative statement on a plan ballot, or can be implied, such as by failure to object or opt out. Compare In re Washington Mutual, Inc., 442 B.R. at 355 (holding that "[f]ailing to return a ballot is not a sufficient manifestation of consent to a third party release."); with In re DBSD North America, Inc., 419 B.R. 179, 218 (Bankr. S.D.N.Y.2009) (holding that creditors who abstained from voting and failed to opt out were deemed to have consented to the third party releases because the ballot contained, in bold font, notice of the release provisions and an opportunity to opt out), judgment aff'd in part and reversed in part, on other grounds, 627 F.3d 496 (2d Cir.2010).
In this case, despite the Class 5 support for the Plan and the lack of objection by a releasing party, the consent of the Class 5 members — or at least informed consent to the release of personal claims — has not been obtained. Even in cases that allow implied consent, the courts require adequate notice on the voting ballot that the releasing parties were giving a release and that their abstention from voting would constitute their consent. In re DBSD North America, Inc., 419 B.R. at 218. Nothing on the ballot here gave such notice to the Class 5 members.
On remand from the Fourth Circuit, the U.S. Bankruptcy Court for the Eastern District of Virginia addressed the propriety of the exculpation provision in Behrmann. In re Nat'l Heritage Foundation, Inc., 478 B.R. at 232-34, aff'd sub nom National Heritage Foundation Inc. v. Behrmann, No. 12-cv-1329, 2013 WL 1390822 (E.D.Va.2013). The court reviewed a number of decisions that uphold exculpation provisions and recognized that "generally [exculpation provisions] are permissible,
There are several factors that lead to the conclusion that the exculpation of the Committee members and the Debtor's officers and directors who served during the case should be approved. The Committee members and the Debtor's directors have served throughout this case without compensation. The Debtor's officers have worked without compensation since the sale closed. Thus, at no small personal cost, they have provided valuable services to the estate that were necessary for the successful sale to PB and to conclude the administration of the estate.
Further, as pertinent here, the Exculpation Provision is narrow in scope. It is limited to post-petition actions and does not include any pre-petition claims against these parties. An exception in the Exculpation Provision exists for claims of gross negligence and willful misconduct. Therefore, the court will approve the Exculpation Provision as it applies to the Committee members and to the directors and officers of the Debtor who served during the bankruptcy case.
For the foregoing reasons, the Court will deny confirmation of the Plan. A separate order will issue.
