Bankrupt Exela Unit Breaking Claim Recovery Deal, Creditors Say

Exela Technologies’ bankrupt units should be stopped from subverting a bankruptcy plan deal by adding millions in newly rejected claims to a fixed recovery pool, creditors said.

The US Bankruptcy Court for the Southern District of Texas should step in to block DocuData Solutions LLC from rejecting several lease agreements that will water down repayments from the document management company’s recently approved Chapter 11 plan, an unsecured creditor committee said in an objection filed Tuesday.

The company sought to reject nine property leases on the eve of receiving approval to reorganize by slashing $1.1 billion in secured debt through a ...