Usad Google traductor los que no hableis inglés.
Lo importante es la disección de los principales motivos por los que nuestro caso
es totalmente diferente y Weil lo va a tener muy dificil para detener nuestra petición de EC.
He aquí los argumentos.
Quote:
2. The interests of equity security holders are adequately represented
by the directors and management of LBHI. They have a fiduciary responsibility to LBHI
that encompasses the interests of equity holders.
Respuesta:
in our case, the interests of equity and directors/management may overlap, but they are certainly not encompassed. not to mention our directors and management have done absolutely *nothing* to inform past or present shareholders of *anything*.
Quote
Further, the Debtors’ equity interest
holders include numerous large institutional investors who possess the resources and
ability to protect their interests without the formation of a committee. The activities of an
equity committee would only duplicate the efforts of such parties, and would not result in
appreciably more representation for equity holders.
Respuesta:
i think joyce has that one covered.. i'm going to assume that everyone who contacted her and sent in a letter was retail.
Quote
3. The financial condition of the Debtors has not yet been
determined. However, based upon the information available it is unlikely that equity
interest holders have any economic stake in the Debtors. The financial collapse of the
Debtors has resulted in huge losses that will be asserted by claimants having priority over
equity interest holders. The current market prices for LBHI’s shares of common stock
and its debt imply that any distribution to equity holders is highly unlikely.
Respuesta:
not the case with us, at all.
Quote
4. The appointment of an equity committee would increase
administrative expenses in exchange for little, if any, increased representation for the
equity holders, at the cost of the creditors having allowed claims.
Controlling Legal Standard
Respuesta:
*i* would say any increase from 0 representation is proportionately significant, i don't know if the court would agree. "at the cost of the creditors" is going to be a tough sell when debt's at around 90.
Quote
5. Section 1102(a)(2) of the Bankruptcy Code provides, in pertinent part, that “
◦n request of a party in interest, the court may order the appointment of additional committees of creditors or of equity security holders if necessary to assure adequate representation of creditors or equity security holders.” The Bankruptcy Code does not define the term “adequate representation.” In re National R.V. Holdings, Inc.,
390 B.R. 690, 695 (Bankr. C.D.Cal. 2008). Instead, courts retain the discretion to
appoint an equity committee based on the facts of each individual case. In re Williams
Communications Group, Inc., 281 B.R. 216, 220 (Bankr. S.D.N.Y. 2002) (citing Albero
v. Johns-Manville Corp. (In re Johns-Manville Corp.), 68 B.R. 155, 159 (S.D.N.Y.
1986)).
6. Courts have considered a number of factors in evaluating the need
for an equity committee. Most notably, an equity committee “should not be appointed
unless equity holders establish that (i) there is a substantial likelihood that they will
receive a meaningful distribution in the case under a strict application of the absolute
priority rule, and (ii) they are unable to represent their interests in the bankruptcy case
without an official committee.” Williams, 281 B.R. at 223. An equity committee should
not be appointed if the debtors appears hopelessly insolvent “because neither the debtor
nor the creditors should have to bear the expense of negotiating over the terms of what is
in essence a gift.” Id. at 220 (citing In re Emons Industries, Inc., 50 B.R. 692, 694
(Bankr. S.D.N.Y. 1985)).
Respuesta:
thanks for making our case for us
Quote
7. In addition to those determinants, courts have also considered the following factors: (i) the number of shareholders, and whether the shares are publicly traded; (ii) the size and complexity of the chapter 11 case; (iii) the delay and additional cost that would result from the appointment of an equity committee; (iv) the likelihood that the debtor is solvent; and (v) the timing of the motion relative to the status of the chapter 11 case. National R.V., 390 B.R. at 695-6 (citing In re Leap Wireless Int'l, Inc.,
295 B.R. 135, 137 (Bankr. S.D.Cal. 2003); Williams, 281 B.R. at 220; In re Wang
Laboratories, Inc., 149 B.R. 1, 2 (Bankr. D.Mass. 1992)).
Respuesta:
iii - delay, possibly. cost would be coming out of equity's slice anyway.
Quote
8. Not every case with a large number of shareholders warrants an
official equity committee. Williams, 281 B.R. at 223 (citing Wang, 149 B.R. at 2). If an
equity committee were necessary in every large case, Congress “would have mandated
the appointment of equity committees instead of leaving it within the discretion of the
UST and the Court.” Id. (citing Albero v. Johns-Manville, 68 B.R. at 160).
this is at the discretion of the UST, oops!
Quote
9. The burden rests on the movant to show that an additional
committee is necessary for adequate representation. In re Dana Corp., 344 B.R. 35, 38
(Bankr. S.D.N.Y. 2006); In re Enron Corp., 279 B.R. 671, 685 (Bankr. S.D.N.Y. 2002).
Respuesta:
how about equity-antagonistic creditors? thx unsecured creditors.
Quote
10. The appointment of an equity committee is “an extraordinary remedy” and should be “the rare exception.” National R.V., 390 B.R. at 695 (citing
Dana, 344 B.R. at 38; Enron, 279 B.R. at 685, et al.); Williams, 281 B.R. at 223.
I. An Equity Committee Should Not Be Appointed Until It is Clear That Equity Holders Have an Economic Interest in the Chapter 11 Cases
11. An equity committee should not be appointed unless it appears likely that the equity holders will receive a meaningful distribution. Williams, 281 B.R. at 223. Though there is no clear litmus test for solvency, the court in Williams examined
the following evidence:
(i) the difference between the debtor’s reported assets and liabilities; ( Yes, let's look at those, and the Notes section )
(ii) the trading price of the debtor’s publicly held stock and bonds; and 90% baby
(iii) the partial recovery to creditors and other parties under a proposed plan. Id. at 220-1.
that's up to weil
12. These chapter 11 cases were filed less than one month ago, and it remains far too early to determine whether the equity holders will receive any meaningful distribution. The Debtors have not yet proposed a plan of reorganization or even fully set out a schedule of their assets and liabilities. The deadline to file proofs of claim has not yet expired, and it remains unclear what demands will be made on the Debtors’ estates.
Though much of this information is forthcoming, the degree of uncertainty remains too
high to justifiably conclude that the equity holders will receive a distribution in these
chapter 11 cases.
Respuesta:
not applicable
Quote
13. Lehman’s stock is currently trading for approximately 11 cents per share, a nearly 100 percent drop in value from its price only months ago. Even more tellingly, Lehman’s unsecured debt largely is trading at less than 10 cents on the dollar, suggesting that market participants believe the prospects for substantial repayment to
creditors are slim. See Table of Lehman Bond Prices, attached as Exhibit A. An auction
of derivatives tied to Lehman Bonds held on October 10, 2008 set a price of 8.625 cents
on the dollar for Lehman bonds, further corroborating that informed markets do not
expect a substantial payout to Lehman’s creditors. See Press Release, Markit Group
Limited, Creditex and Markit Announce Final Results of Lehman Credit Event Auction
(October 10, 2008), attached as Exhibit B. If the likelihood of a full recovery to creditors
is slight, the prospects for a residual payment to shareholders are even more dire.
Respuesta:
yeah, not here
Quote
II. The Added Cost to the Estates of an Equity Committee Far Outweighs Any Minimal Increase in Representation for Equity Holders 14. In determining whether to appoint an equity committee, courts apply a balancing test to weigh the cost of an equity committee against the concern for adequate representation. Wang, 149 B.R. at 3. The appointment of an equity committee
would significantly increase costs to the Debtors, since such appointments are “closely
followed by applications to retain attorneys and accountants.” In re Saxon Indus., Inc.,
39 B.R. 945, 947 (Bankr. S.D.N.Y. 1984). In addition to the direct cost of maintaining an
additional staff of professionals, the appointment of an equity committee would impose
intangible costs on the Debtors’s estates, such as delay and disruption in the
administration of these chapter 11 cases. See Albero v. Johns-Manville, 68 B.R. at 160.
The appointment of an additional committee would stymie the chapter 11 process in
exchange for little, if any, benefit to equity holders.
Respuesta:
here's a good one.. at least $7.5B worth in face value in the preferred equity alone is at stake (let's take weil's claim that the REITs are in play at face value). not counting 1.7billion common. the relative cost of representation for equity is miniscule in comparison.
