The PBGC filed an objection to the Debtors' motion establishing procedures for settling certain claims.
The PBGC objects to the provisions of the Debtors' proposed procedures that would permit the Debtors to settle claims where the settlement amount is within 10% of the scheduled amount of the creditors claim, without court or creditor scrutiny, so long as the variance is $1 million or less. The PBGC objects that there is no limitation on the size of the settlement within this category. Moreover, because the Debtors have reserved the right to amend their schedules, the Debtors would have complete discretion to enter into claim settlements of any size without the scrutiny of creditors or the Court. The PBGC argues that it is inappropriate for the Debtors to have unfettered discretion to settle claims of any magnitude without the necessity of complying with Bankruptcy Rule 9019, which requires court approval for settlements in bankruptcy cases.
Objections to these procedures were due on or before March 15. The PBGC states that the Committee received an extension until March 16 at noon. The PBGC believes that the Debtors and Committee are discussion a resolution of the issues subject to this Objection, but the OBGC is filing the Objection as a protective measure.
The matter is scheduled to be heard on March 22, 2012 at noon.