Novation trustee files objection to plan as ‘unclear,’ ‘inappropriate’

By Susanna Moon

Chicago, April 24 – Novation Cos., Inc. received an objection to the confirmation of the joint Chapter 11 plan of reorganization of Novation and Novastar Mortgage, LLC, according to a motion filed Monday with the U.S. Bankruptcy Court for the District of Maryland.

The U.S. trustee for region four, which includes the district of Maryland, Baltimore division, said the court should deny confirmation of the plan because the plan “is unclear” about why the company has requested “broad immunity from liability for a variety of acts to a variety of persons.”

“The proposed broad grants of immunity Novation requests are inappropriate and preclude confirmation of the plan,” the document stated.

As previously reported, the company filed a joint plan of reorganization and related disclosure statement on Feb. 14.

The company then said on April 13 that it had obtained an extension through June 30 of its exclusive period for soliciting votes on a Chapter 11 plan.

Kansas City, Mo.-based Novation is looking to acquire operating businesses or make other investments that generate taxable earnings. It filed for Chapter 11 on July 20, 2016 under the case number 16-19745.

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