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Alto Maipo’s Chapter 11 Plan Releases Should Be Rejected, Trustee Says

May 6, 2022, 7:43 PM

Bankrupt Chilean hydroelectric power plant Alto Maipo SpA’s proposed Chapter 11 plan should be rejected for impermissibly granting third-party liability releases and acting as a settlement, the Justice Department’s bankruptcy watchdog said.

The U.S. Trustee’s office objected Thursday to the proposed plan, arguing it imposes nonconsensual, third-party releases on at least 32 categories of people, entities, and other parties “merely because they are related in some fashion to the creditors who voted to accept the plan.”

None of the related parties, such as employees of creditors who voted to accept the plan, have been able to give consent to the ...