The Disclosure Statement Fails To Provide
Members Of Class 19 With Adequate Information
Regarding The Likely Amount Of Claims In Class 18.
The Court will likely recall that, during the most recent confirmation proceedings
in July 2011, the Debtors attempted to persuade the Court to ignore positions taken by
representatives of Classes 19, 20, 21 and 22 with unsupported statements that such classes were
“hopelessly out of the money” and that their arguments were made only to extort “hold up”
value. In advancing that position, Debtors’ counsel suggested that there were tens of billions of
dollars of claims in Class 18 that would make a recovery to Classes 19 and below impossible.
See Transcript of July 14, 2011 Hearing (Testimony of Jonathan Goulding) at 182:9-184:20
(discussing the “forty billion dollar MARTA claim” that would have to be satisfied before
recoveries flowed down to the preferred stock classes). Such suggestions, while useful in the
situation in which Debtors’ counsel found itself (needing to discredit arguments that the interests
of Classes 19 and below did, in fact, merit consideration), were contrary to positions previously
taken by the Debtors. See Debtors’ Amended Thirty-Second Omnibus (Substantive) Objection
to Claims (Claim Nos. 3812, 2689, 3174, 3179, 3187) [Docket No. 3801] (claiming the
“MARTA” claim to be worthless); Motion to Estimate the Maximum Amount of Certain Claims
for Purposes of Establishing Reserve Under the Debtors’ Confirmed Chapter 11 Plan [Docket
No. 5971] (same). And, in the months since Debtors’ counsel’s statements regarding the
existence of tens of billions of dollars in Class 18 claims, more and more of such potential claims
have proven to be worth little more than token settlements (if any amount). See, e.g., (a) Notice
of Withdrawal of Proof of Claim for Ontario Teachers’ Pension Plan Board re: Claim Nos. 2759
and 2761 [Docket No. 9186]; (b) Notice of Withdrawal of Proof of Claim for Brockton
Contributory Retirement System re: Claim No. 2763 [Docket No. 9185]; (c) Motion of Debtors
for an Order Pursuant to Section 105(a) of the Bankruptcy Code and Bankruptcy Rule 9019,
Approving Stipulation and Agreement by and Among the Debtors and the G&E Group [Docket
No. 9279] (seeking authority to resolve $600 million in purported Class 18 claims for pennies on
the dollar, and calling into question billions of dollars in similar claims).
34. To provide members of Class 19 with adequate information regarding the Plan (in
particular, the likelihood of receiving an additional recovery in the form of Liquidating Trust
proceeds upon satisfaction of Class 18 Claims (if any)), the Disclosure Statement should be
updated to provide a detailed description of the nature and amount of any remaining claims
asserted in Class 18 (including any analysis the Debtors have conducted regarding the viability
of such claims).