By Dietrich Knauth
June 12 (Reuters) – A U.S. bankruptcy judge in Houston said on Friday bankrupt auto parts maker First Brands could move ahead with a liquidation plan that would fund lawsuits against the company’s indicted founder and other insiders in an attempt to recoup money for creditors.
U.S. Bankruptcy Judge Christopher Lopez allowed First Brands to solicit votes on its preferred proposal for winding down its business, rejecting demands from a government watchdog and some creditors who asked the judge to convert the case to a quicker and more straightforward Chapter 7 liquidation that would be managed by a court-appointed trustee.
Lopez said First Brands deserves a chance to see if its creditors will support its…