U.S. Trustee Objects to Third-Party Releases in LandAmerica’s Reorganization Plan
The U.S. trustee in LandAmerica Financial Group's Chapter 11 bankruptcy proceeding is objecting to the company's reorganization plan because it releases nearly everyone involved, including lawyers, from liability for negligent actions. In an objection filed in Virginia federal court last week, the trustee states that the releases do not comply with the bankruptcy code or case law. LandAmerica filed for protection in 2008 after its Section 1031 exchange business collapsed due to its auction-rate securities investments.
