Transcript of September 22, 2022 Hearing — In re TPC Group Inc.
- Date
- 2022-09-22
Source document: Transcript of September 22, 2022 Hearing — In re TPC Group Inc.; document type: Hearing transcript (11 pages, Exhibit A to Docket 437).
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
IN RE:
. Chapter 11
.
TPC GROUP INC., et al., . Case No. 22-10493 (CTG)
.
. Jointly Administered
.
. Courtroom No. 7
. 824 Market Street
. Wilmington, Delaware 19801
.
Debtors. . Thursday, September 22, 2022
. . . . . . . . . . . . . . . 9:00 a.m.
TRANSCRIPT OF HEARING
BEFORE THE HONORABLE CRAIG T. GOLDBLATT
UNITED STATES BANKRUPTCY JUDGE
APPEARANCES:
For the Debtors:
Scott Bowling, Esquire
BAKER BOTTS LLP
30 Rockefeller Plaza
New York, New York 10112
James Prince, Esquire
BAKER BOTTS LLP
2001 Ross Avenue, Suite 900
Dallas, Texas 75201
Audio Operator: Theresa Mistretta
Transcription Company: Reliable
The Nemours Building
1007 N. Orange Street, Suite 110
Wilmington, Delaware 19801
Telephone: (302)654-8080
Email: gmatthews@reliable-co.com
Proceedings recorded by electronic sound recording,
transcript produced by transcription service.
Exhibit A
Case 22-10951-CTG Doc 437-1 Filed 01/12/23 Page 1 of 11
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APPEARANCES (CONTINUED):
For the Debtors:
Robert Dehney, Esquire
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market Street, 16th Floor
P.O. Box 1347
Wilmington, Delaware 19899
For the U.S. Trustee:
Rosa Sierra Fox, Esquire
UNITED STATES DEPARTMENT OF JUSTICE
OFFICE OF THE UNITED STATES TRUSTEE
844 King Street, Suite 2207
Lockbox 35
Wilmington, Delaware 19801
For the Supporting
Sponsors:
Hugh Murtagh, Esquire
LATHAM & WATKINS LLP
1271 6th Avenue
New York, New York 10020
For the Committee:
Naomi Moss, Esquire
AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryant Park
Bank of America Tower
New York, New York 10036
Case 22-10951-CTG Doc 437-1 Filed 01/12/23 Page 2 of 11
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INDEX
MOTION GOING FORWARD AS A STATUS CONFERENCE:
PAGE
Agenda
Item 2: Debtors’ Motion for Entry of an Order (I)
4
Approving the Disclosure Statement, (II)
Fixing Voting Record Date, (III) Approving
Solicitation Materials and Procedures for
Distribution Thereof, (IV) Approving Forms
Of Ballots and Establishing Procedures for
Plan Voting, (V) Scheduling Hearing and
Establishing Notice and Objection Procedures
In Respect of Confirmation of Plan, and (VI)
Granting Related Relief
[D.I. 490; Filed 7/22/22]
Court’s Ruling:
68
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(Proceedings commenced at 9:00 a.m.)
THE COURT: Good morning.
MR. PRINCE: Good morning, Your Honor.
THE COURT: Mr. Prince.
MR. PRINCE: Jim Prince on behalf of the Debtors
with Baker Botts, and I have my partners, Scott Bowling, and
obviously, Mr. Dehney from the Morris Nichols firm. I'd also
like to introduce, although I think Your Honor met him at the
first day of hearing, but it's always a treat when we have
our hardworking associates travel with us, so this is Ms.
Lauren Randall and that's Mr. Kevin Chu.
THE COURT: Welcome to Wilmington, all.
MR. PRINCE: Your Honor, we have a disclosure
statement for Your Honor's consideration and approval. We've
adjourned it twice and that was to allow the parties to
continue to negotiate. Those negotiations will continue, but
it's the Debtor's view that we need to go ahead and get the
disclosure statement approved.
We're going to present a schedule today, Your
Honor, and that schedule is going to have confirmation
slipping a couple weeks from the week of October 24 to the
week of November 7th. We'll talk about that schedule and
address any of the Court's concerns, and if parties have
other issues they want to talk about regarding the
scheduling, we'll address those as they arise.
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THE COURT: Okay, okay. So, look, I understand
that, I understand your position. I do think that the
question whether to engage with your client or not is
essentially a business judgment on which the debtor gets a
measure of deference and, without passing judgment on whether
it was a good decision or a bad decision for the debtor to
proceed, I think they're within their rights to make the
judgment they made.
MR. DELLA PENNA: Understood, Your Honor.
THE COURT: Okay. Thank you.
MR. DELLA PENNA: Thank you.
THE COURT: Any other party in interest want a
chance to be heard?
(No verbal response)
THE COURT: Okay. So let me do my best to resolve
the issues in front of me in a way that is orderly and
rational and gives folks the guidance they need to keep the
case moving. Here's where I am.
So, on the big-picture disclosure statement
approval, it seems to me there are not standing objections to
the language in the disclosure statement. I've read it, I
think that the document gives creditors sufficient
information to permit them to make an informed vote. It has
the kind of information that is typical and customary in a
disclosure statement and I'm comfortable entering an order
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approving it.
I think -- let me also say, just to resolve the
things that I think I can resolve relatively easily, I said
before what I think about the opt-in/opt-out mechanism, I am
comfortable with the view that a party can be deemed to have
consented to what the plan does, including a third party
release, if that party is given the opportunity to opt out
and doesn't take it. So I respect and understand the view
that, in order to be consensual within the meaning of
Continental, one, a creditor would be required to
affirmatively evince consent by opting in, that there are
certainly thoughtful opinions that take that view, that isn't
my view. And so I'll overrule the objection to that extent
without prejudice to the right of any party in interest who
object to confirmation on that or any other ground.
I think I'm also comfortable with the debtors'
proposal that no opt-out form be sent to, essentially,
unclassified creditors or anyone who is, essentially, not a
voting creditor. They'll receive a notice and no one has
complained about the adequacy of that notice. And I think
there's a fair question about, to the extent the release is
broader than claims that are essentially derivative of the
debtor, whether the release is too broad, but that's a
confirmation issue and -- but otherwise, to the extent those
parties are equity holders and have thus consented under the
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RSA or are creditors who are administrative or priority
creditors who are being paid in full, I'm fine with just
giving notice without the opt-out form.
Obviously, those parties could file a confirmation
objection, but I don't think we have to give a form to those
creditors.
The hardest issue is the form that goes to those
creditors who are impaired and aren't parties to the RSA,
it's primarily Class 4. And, I've got to say, this has been
an interesting discussion and I don't think the question is
simple or obvious. I think the arguments that folks have
made about permitting a creditor to make a decision whether
to accept the plan and give a release or not is not
analytically irrational at all.
That said, I view this in the context of approving
a ballot as part of the overall analytic construct of
approving a disclosure statement and setting up a mechanism
by which, under the facts and circumstances of the case,
creditors are given the ability to make an informed decision
about whether to accept the plan or not and how to protect
their rights.
I also come at this -- I've said this in other
settings, but I'm a Judge on a court that, as of today, has
seven judges and there are a variety of different views, and
staying sort of within the guardrails of the views of my
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colleagues is something that, if I felt like I was required
to do otherwise because the law dictated me outside the
guardrails, I'd follow the law where it took me, but on
discretionary matters it seems prudent to stay within those
guardrails. And those guardrails are, essentially, on the
one hand, decisions in cases like WAMU and Emerge that
require opt-in to, on the other hand, Indianapolis Downs that
basically has said what I've said before, though not in
writing, that I'm comfortable with an opt-out regime, and I'm
not aware of any of my colleagues to have said it's okay to
condition the right to vote in favor of a plan on granting a
release. So I think that's a step farther than anyone has
gone before and my judgment is it's -- while I am open to
that in another case, I'm not prepared to do it in the
circumstances of this case.
So I hear and respect the argument and I think it
was well presented and it's by no means outside the bounds of
fair advocacy, I think it's an interesting point, but my --
and I do think this is a question of judgment, but my
judgment is, in the circumstances of this case and on the
record before me, it's not appropriate to do here.
So my ruling, for what it's worth, is that in
order to approve that ballot, the ballot will need to give
every creditor in Class 4 the option to opt out of the third
party releases without affecting their ability to vote in
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favor or against the plan. I don't think that ought to be
hard to implement and there are plenty of forums in which
that's been done.
And, again, I understand that's not what the
debtor is asking for and I hear and respect their arguments,
but that's where I am, and it's limited to the circumstances
of this case, I'm open-minded in a different case to
considering that again.
So have I given the parties enough guidance to go
do what they need to do?
MR. BOWLING: If we could have just one moment,
Your Honor?
THE COURT: Certainly.
(Pause)
MR. BOWLING: Your Honor, we appreciate your
ruling, the debtors would just reserve the right at
confirmation to argue that the releases are appropriate even
if people do check the box.
THE COURT: Of course. At confirmation,
everyone's rights with respect to any matter at confirmation
are fully preserved. So nothing I said today was -- did or
was intended to address any -- limit anyone's rights at
confirmation in any respect.
MR. BOWLING: Of course. That's all, Your Honor.
Thank you.
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THE COURT: Okay. Are there any matters that were
before me today that I meant to rule on but failed to? And I
don't say that in the form of, like, what's in my head that I
forgot about, but were there other matters where the parties
are seeking resolution where I've not given you what you
need?
MR. PRINCE: Your Honor, we did file a stipulation
regarding some insurance proceeds that's -- it's around $47
million, so it's pretty significant.
THE COURT: I thought --
MR. PRINCE: Did you already sign that?
THE COURT: -- I saw a C&O on that, I thought I
had -- I had --
MR. PRINCE: If you've already signed it, then
great.
THE COURT: If I haven't, I'll go back and check
and make sure I do.
MR. PRINCE: Perfect.
THE COURT: Is there any other matter that should
be addressed at housekeeping, anything else that I can do to
be helpful to the parties?
(No verbal response)
THE COURT: Okay. If not, I do thank everyone for
the terrific arguments today. This is a very interesting
issue and not an obvious one, so it was very helpful to me.
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And, with that, we stand adjourned. Thank you.
COUNSEL: Thank you, Your Honor.
(Proceedings concluded at 11:31 a.m.)
CERTIFICATION
We certify that the foregoing is a correct
transcript from the electronic sound recording of the
proceedings in the above-entitled matter to the best of our
knowledge and ability.
/s/ Tracey J. Williams September 22, 2022
Tracey J. Williams, CET-914
Certified Court Transcriptionist
For Reliable
/s/ Mary Zajaczkowski September 221,
2022
Mary Zajaczkowski, CET-531
Certified Court Transcriptionist
For Reliable
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