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Point Blank Solutions - Creditor Committee Statement on Lift Motion

|Includes: Point Blank Solutions, Inc. (PBSO)

The Point Blank Solutions Official Committee of Unsecured Creditors filed a short statement today on D David Cohen's motion to lift the stay on Cohen's appeal.

It is brief, only 2+ pages, but this section is a good summary:

3.  At this time, the Committee supports the relief sought by Cohen in the Lift Stay Motion solely to permit the United States Court of Appeals for the Second Circuit to rule as to the legality of the provisions indemnifying Mr. Brooks from any personal liability under SOX 304.   The Committee, however, does not support the lifting of the automatic stay for any consequences that stem from the unwinding of the Settlement, including but not limited to the return of funds to the various third parties to the Settlement pursuant to the related escrow agreement.  Therefore, any relief from stay order would necessarily be narrow and provide extensive protections for the estates.  Such an order should be the product of consensual discussions between the Committee, the Debtors and the Movant.

 The committee asks for a 30 day adjournment to produce a consensual order.

 

Analysis:

This seems the best solution, if it is feasible.  A lift of the stay on the liability of Mr. Brooks under SOX.

The question is, is such a limited lift of the stay possible?  Will the Appeals Court be able and willing to rule based on the process to date on such a narrow question?  And, even if the other aspects of the settlement are stayed, the stay is not inevitably a permanent dismissal.  If the other aspects of the settlement are stayed, how long will they be stayed?  It would seem Mr. Brooks and the other corporate officers will fight the notion that this issue can be considered piecemeal.

There were no cases cited in the statement, so nothing to reference.


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