X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

While the appointment of a creditors’ committee is required in every chapter 11 case, equity committees are not.[FOOTNOTE 1] In fact, they “should be the rare exception.”[FOOTNOTE 2] Yet, recently, in In re Delphi Corp., et al.,[FOOTNOTE 3] the court directed the appointment of an equity committee — the expense of which will be borne by the Delphi estate — despite the rigorous objections of Delphi Corp., the U.S. Trustee, the Creditors’ Committee and General Motors. Interestingly, the request was made by Appaloosa Management L.P., a 9 percent shareholder of Delphi that had acquired its interest after the commencement of the case. Delphi joins Adelphia, Mirant and Kmart as recent cases with equity committees.[FOOTNOTE 4] In contrast, courts declined to direct the appointment of equity committees in Conseco, UAL, Worldcom, Global Crossing, Enron, and Pacific Gas & Electric.[FOOTNOTE 5] Factors courts consider in determining whether to appoint an equity committee include: (i) whether the interest of shareholders are otherwise adequately represented, (ii) the debtor’s solvency and the prospects for a meaningful distribution to equity, (iii) the complexity of the case, (iv) whether the stock was widely held and actively traded, (v) timeliness, and (vi) the balance between concerns for adequate representation and the cost to the estate.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at customercare@alm.com

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.