The U.S. Securities and Exchange Commission (SEC) and the U.S. Trustee’s Office have expressed concerns about third-party releases included in the Chapter 11 bankruptcy plan of biotechnology company, Amyris. Both authorities have asserted that such nonconsensual releases are permissible only under exceptional circumstances, which in their view, Amyris has failed to prove.
The focal concern lies around the stipulation that Amyris’s plan allegedly includes nonconsensual third-party releases. These releases generally involve an agreement by the debtor to waive any claims or causes of action against third parties, usually stakeholders or insiders, in exchange for their contribution to the reorganization plan.
Credits of the bankruptcy code provide that consensual third-party releases may be approved by the court under certain circumstances. However, the SEC and U.S. Trustee’s office argue that the circumstances regarding Amyris’s case do not justify these releases. They maintain that the allowance for such releases is in extraordinary cases only, and have suggested that Amyris has not met the necessary criteria.
The exact details and reasoning behind SEC’s and the U.S. Trustee’s Office assertions remains undisclosed. For more comprehensive information pertaining to this case, click here.