A group of state attorneys general have filed an objection to the proposed bankruptcy exit plan by three bankrupt Mocksville tobacco manufacturers. Bankruptcy trustee Peter Tourtellot filed a reorganization plan Jan. 30 that could enable Renegade Holdings Inc., Renegade Tobacco Co. and Alternative Brands Inc. to emerge from Chapter 11 protection as early as late this month. The plan would remove Calvin Phelps, who is involved in a criminal investigation, as their owner and from any investor and operational role. An escrow dispute involving the National Association of Attorneys General has become a big legal hurdle. The objection, filed Friday, will be heard at a hearing at 9:30 a.m. March 13 at the U.S. Bankruptcy Court in Greensboro. The bankruptcy exit plan also could be heard at that time. The plan calls for the companies' financial obligations to be paid within four years of their exit from bankruptcy. The attorneys general of 16 states claim Renegade Holdings owes them a delinquent escrow amount of $16.7 million. Tourtellot said in the plan that the amount is $7.93 million. The states are listed as the first priority of the creditors' fund once federal and state excise taxes of about $870,000 are paid. In the objection, North Carolina is listed as claiming $344,034 in escrow payments due. Tourtellot is objecting to $150,035 of that amount. Some states have said they would delist Renegade Holding's cigarette brands if they are not paid their escrow amounts. When a state delists brands from a list of government-approved tobacco products, retailers are required to sell off and remove those brands from their shelves within 60 days. Tourtellot said the possibility of the brands being delisted has led some retailers and wholesalers to not stock the cigarettes. The companies have a combined 101 employees.
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