United Sporting Companies: Justice Department Objects

One step forward, one step back. A day after we heard that United Sporting Companies had repaid Prospect Capital (PSEC) a seventh of its loan, we hear that the Justice Department is not happy. According to Bloomberg Law:

…[the] bankruptcy watchdog division objected to firearms distributor United Sporting Companies’ proposed liquidation plan, concerned that it grants pre-bankruptcy lenders immunity from lawsuits related to the case.

The Chapter 11 plan’s exculpation provision goes too far, the U.S. Trustee said in its Oct. 15 objection filed at the U.S. Bankruptcy Court for the District of Delaware.

We don’t know how to evaluate this new spinnet. We’ll just have to wait and see if anything further develops.