RCS Capital Corp.’s reorganization plan is nearing finalization—a Delaware bankruptcy judge agreed Tuesday to sign off on the plan after significant changes to the litigation releases in the plan.
An amended plan filed Monday called for releases for the debtors, postpetition lenders and their agents, all subsidiaries and affiliates of those parties and the employees, directors and officers of the parties. The breadth of the releases was the final sticking point between the debtor and the objecting parties made up of RCS’ founder Nicholas Schorsch and a group of related entities including AR Capital and RCAP Holdings, known collectively as the ARC parties.

To resolve the issues with the releases, Judge Walrath ruled that the releases would be limited to the subsidiaries, officers and directors and employees of the named parties, removing references to assigns and successors.

The former executives are represented by Stephen J. Shimshak, Claudia Tobler and Christopher J. Hopkins of Paul Weiss Rifkind Wharton & Garrison LLP, Matthew G. Summers of Ballard Spahr LLP, and Michael C. Miller and Michael G. Scavelli of Steptoe & Johnson LLP.