Wednesday, February 27, 2008

PL Bankruptcy Hearing Tomorrow

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Key Palco hearing set for Thursday
John Driscoll/The Times-Standard
Article Launched: 02/26/2008 01:27:25 AM PST

A vital bankruptcy court hearing on Thursday will begin to reveal if the restructuring plans for the Pacific Lumber Co. meet its creditors' muster, and lay the groundwork for the remainder of the case. Attorneys for the parties are expected to argue over the summary of three different plans submitted to the U.S. Bankruptcy Court in Corpus Christi, Texas. The disclosure statement, as it's called, is key to the case.

”It's supposed to have a bunch of information to help creditors make intelligent decisions on how to vote on a plan,” said San Francisco Bay Area bankruptcy expert Peter Clapp, who has been following the case.

The unsecured creditors committee has been ordered by the judge to come up with a single disclosure statement that outlines the three plans before Thursday's hearing. Either at the hearing or shortly afterward, Judge Richard Schmidt will determine whether the disclosure statement is adequate, and then creditors will get to vote up or down on each plan. In April, Schmidt is scheduled to hold a confirmation hearing, in which he'll consider the votes each plan received and whether there are enough votes to reach a certain threshold. If more than one plan gets enough votes, the judge may then decide which plan is best for creditors.

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