WILMINGTON, Delaware (Dow Jones) ? Some major creditors of Trenwick America Corp. got court approval this week to propose an alternative to the Chapter 11 plan advocated by the specialty insurer.

US Bankruptcy Chief Judge Mary Walrath signed off on a settlement between the company and some of its creditors that ended the possibility of a dispute over rights to steer Trenwick America?s bankruptcy case. ?This case cannot afford to have a contested confirmation hearing,? said Irena Goldstein, attorney for Trenwick America, at Tuesday?s hearing in the US Bankruptcy Court in Wilmington.

Walrath gave the creditors group until May 7 to file a disclosure statement explaining its proposal to those entitled to vote on Trenwick America?s Chapter 11 exit strategy.

The company?s own plan is likely to include dismissal of the Chapter 11 cases of its parent, Trenwick Group Ltd. and LaSalle Re Holdings Ltd., said Carey Schreiber, attorney for Trenwick America.

Bermuda insolvency overseers are handling the liquidation of Trenwick Group and LaSalle Re, the attorney said.

Creditors Phoenix Partners LP, John Gorman, Phaeton International (BVI) Ltd. and John C. Waterfall moved to open up Chapter 11 plan rights in the case after Trenwick America offered its version of an exit strategy.

According to the creditors, the company?s plan doesn?t have sufficient funding to pay Trenwick America?s Chapter 11 expenses and pursue possible lawsuits.