The Chapter 11 bankruptcy exit plan by Abengoa's (NASDAQ:ABGB) main U.S. subsidiary, Abeinsa Holding, violates the law by shielding the Spanish parent from lawsuits, says the U.S. Trustee overseeing the administration of the case.
The objection threatens to derail Abengoa's debt restructuring plan to avoid its own bankruptcy in Spain; the renewable energy company already received approval from its shareholders and a Spanish court to cut $10B of debt, but parts of the complex plan hinge on the successful reorganization of its U.S. subsidiaries.
In a filing today with the U.S. Bankruptcy Court in Delaware, the U.S. Trustee said the plan may not comply with federal laws and regulations and should not be confirmed by the court.