Gol Bankruptcy Plan Reversed Over Faulty Liability Releases (1)

Gol Linhas Aéreas Inteligentes SA’s reorganization plan contained impermissible litigation releases for third parties, a New York federal judge said, reversing a bankruptcy court’s approval of the Brazilian airline’s restructuring scheme.

Gol’s Chapter 11 plan, which enabled the budget airline to recapitalize and overhaul its aircraft fleet, didn’t afford creditors the sufficient opportunity to opt out of provisions releasing potential lawsuits against company executives, lenders or other non-bankrupt business affiliates, Judge Denise Cote of the US District Court for the Southern District of New York said in a decision Monday.

Gol creditors were deemed to have consented to the plan ...