U.S. Bankruptcy Court Judge Mike Nakagawa will decide Jan. 31 whether to approve homebuilder American West Development Inc.’s Chapter 11 bankruptcy reorganization plan.
At a Tuesday hearing, assistant U.S. Trustee Athanasios Agelakopoulos attacked some aspects of the trust that American West will set up to compensate home buyers that find defective work. The trust will be funded with $1.5 million to cover small claims in cash or pursue larger ones from insurance companies.
Agelakopoulos challenged the independence Las Vegas accountant James Moore would have as administrator of the trust.
American West attorneys argued that the trust and the entire reorganization plan met all legal standards.
The terms call for lenders to reduce what they are owed by more than two-thirds and for majority owner Larry Canarelli to pay $10 million to control the reorganized company.
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