In re Trico Marine Services, (S.D.N.Y.)

Plans - Debtor was not liable to former equity holders for alleged fraud at plan confirmation hearing.

A bankruptcy court did not clearly err in finding that a Chapter 11 debtor's chief financial officer (CFO) had not testified falsely at a plan confirmation hearing, and that the debtor was not liable in fraud to former equity owners when the bankruptcy court, in alleged reliance on this testimony, confirmed a plan that wiped out existing equity. The CFO, when questioned about the debtor's fourth quarter earnings before interest, taxes, depreciation, and amortization (EBITDA), failed to mention that the debtor was outperforming its fourth quarter EBITDA projections by more than 30% and indicated instead that this fourth quarter EBITDA was not "materially different." The bankruptcy court, in finding that the CFO's testimony was not false and was not given with the requisite intent to deceive, had relied on its determination of the credibility of the explanation offered by the CFO after the fact, that in stating that debtor's fourth quarter EBITDA was not "materially different," he was referring to the debtor's EBITDA in relation to its overall valuation, which continued to be poor despite this fourth quarter improvement, and not in relation to his projections.