IN RE CONSUMERS IGA THRIFTWAY, INC. (Bankr.E.D.Okla. 2005)

TOM CORNISH, Bankruptcy Judge

On the 2^nd day of February, 2005, the Motion of the Official Committee of Unsecured Creditors to Include with Debtors' Disclosure Statement the Committee's Solicitation to Reject Debtor's Plan, filed by the Official Committee of Unsecured Creditors ("Committee"); and Objectionto Motionof the Official Committee of Unsecured Creditors to Include with Debtors' Disclosure Statement the Committee's Solicitation to Reject Debtor's Plan, filed by the Official Committee of Unsecured Creditors, filed by the Debtors; came on for hearing. Appearances were entered by Sam G. Bratton II and Leonard I. Pataki, Attorneys for the Debtors; Scott McDonald, Attorney for the Committee; and Paul Thomas, Attorneyfor U.S. Trustee. After review, this Court does hereby enter the following findings and conclusions in conformity with Rule 7052, Fed.R.Bankr.P., in this core proceeding.

In an Order entered December 8, 2004, this Court granted the Debtors' Motion to Extend Exclusivity Period for Filing a Chapter 11 Planand Disclosure Statement, extending the Debtors' exclusive time within which to file a plan and disclosure statement to December 20, 2004. The Debtors' exclusive time within which to gain acceptance of such plan was extended to December 31, 2004.

The Committee filed its own Chapter 11 Plan and Disclosure Statement on January 3, 2005. In an Order entered January 21, 2005, this Court extended the Debtors' exclusive time within whichto gain acceptance of its Planto February20, 2005, pursuant to the Debtors' Motion to Reconsider this Court's Order entered December 8, 2004. A hearing on both disclosure statements was held on January 26, 2005, at whichthe Committee was ordered to file an amended disclosure statement within five (5) days, and the Debtors' Disclosure Statement was taken under advisement. The Committee then filed the present Motion to include the Committee's solicitation on January 26, 2005.

The Committee seeks to include a solicitation letter with the Debtors' Disclosure Statement that istobe mailed to creditors. The Committee's solicitation letter is essentially a recommendation to creditors to vote against the Debtors' proposed plan of liquidation. The Committee asserts that the letter is appropriate under 11 U.S.C. § 1125 and is necessary to provide adequate protection to the creditors.

Debtors object to the Committee's Motion, stating that the letter contains material inaccuracies. Debtors also assert that the letter constitutes improper solicitation for the Committee's Plan, and that the Committee's Disclosure Statement has not yet been approved by this Court.

Section 1125(b) of the Bankruptcy Code provides in part:

An acceptance or rejectionof a planmay not be solicited after the commencement of the case under this title from a holder of a claim or interest with respect to such claim or interest, unless, at the time of or before suchsolicitation, there is transmitted to such holder the plan or a summary of the plan, and a written disclosure statement approved, after notice and a hearing, by the court as containing adequate information.

At the hearing, the Committee cited two cases thathave dealt withthis issue, Century Glove, Inc., v. First Am. Bank of New York, 860 F.2d 94 (3^rd Cir. 1988) and In re Clamp-All Corp., 233 B.R. 198 (Bankr. D. Mass. 1999). The court in Century Glove found that § 1125 does not "empower the bankruptcy court to require that all communications between creditors be approved by the court." Century Glove, 860 F.2d at 100. That court also held that presenting a draft plan to a creditor without requesting that creditor's vote does not constitute the solicitation of acceptances. Id. at 102. The Committee urges this Court to follow the reasoning and findings in the Century case and allow the Committee's solicitation letter to be sent with the Debtors' Disclosure Statement.

The court in Clamp-All disagreed with the court's analysis in Century Glove, stating that it "fails to sufficiently recognize Congress' intention to allow the debtor a reasonable time to obtain confirmation of a plan without the threat of a competing plan." Clamp-All, 233 B.R. at 207-08. However, the court in Clamp-All acknowledged that negotiations among creditors can occur without discussingalternate plans that have not been approved. Id. at 209. The court noted, for instance, that parties are not "prohibited from pointing out failings which they perceive to be present in the debtor's plan." Id. (citation omitted).

Neither case, however, addresses the specific issue inthis case regardingwhetherthe Committee's solicitation letter should be mailed with the Debtors' Disclosure Statement or separately.

This Court shares some of the Debtors' concerns with certain statements in the letter that appear to be inaccurate or misleading statements. This Court believes that the Committee may negotiate and discuss with other creditors their perceived failings inthe Debtors' Plan, and this Court willnot prevent the Committee from separately sending their solicitation letter. However, this Court does believe that the Debtors' Disclosure Statement should be mailed without the Committee's solicitation letter contained in the same mailing. Therefore, this Court finds that the Motion should be denied.

IT IS THEREFORE ORDERED that the Motionofthe Official Committee of Unsecured Creditors to Include with Debtors' Disclosure Statement the Committee's Solicitationto Reject Debtor's Plan, filed by the Official Committee of Unsecured Creditors is denied.

IT IS FURTHER ORDERED that an Order approving the Debtors' Disclosure Statement will be entered separately.