American West Development plan of reorganization denied confirmation

By Jim Witters

Wilmington, Del., Oct. 29 - A judge denied confirmation of American West Development, Inc.'s plan of reorganization, according to documents filed Oct. 29 with the U.S. Bankruptcy Court for the District of Nevada.

According to the filing, the ruling was made orally on Sept. 27 by judge Mike K. Nakagawa.

In making the ruling, the judge sustained parts of the U.S. Trustee's objection that:

• American West filed its plan supplement and plan supplement amendment after the deadlines to object and submit votes on the plan;

• The debtor did not provide class 4 claimants with adequate information regarding the self-insured retention provisions of debtor insurance policies, the ruling states;

• The injunctive provisions in the plan - solely as they apply to and protect non-debtor third parties - are prohibited; and

• The injunctive provisions in the plan - solely as they apply to and protect the futures representative - are prohibited.

The judge overruled the trustee's objections that claimed the exculpation provisions are inappropriate and the plan failed to provide appropriate treatment for construction defect claims arising between the petition date and the plan effective date.

A status conference is scheduled for 1 p.m. ET on Oct. 30 to consider further proceedings in the case.

American West, a Las Vegas-based homebuilder, filed for bankruptcy on March 1. Its Chapter 11 case number is 12-12349.

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