The U.S. Bankruptcy Court issued an order denying Mangrove Partners Master Fund’s motion for an order appointing an official committee of equity security holders to the Peabody Energy case.
As previously reported, Mangrove Partners Master Fund had argued, “It is critical that the equity holders of Peabody be given a fair opportunity to demonstrate that they are entitled to recover on their investments, before their interests are improperly wiped out entirely. Without an Equity Committee, the shareholders will have no means to preserve and realize the value that they believe exists in the Debtors.”
In addition, “Under these circumstances – where there is substantial evidence of value to the Peabody equity, and where the Debtors and creditors who stand to gain at the expense of equity have shut the equity holders out of plan negotiations – meaningful consideration of whether there is value to Peabody equity can only be achieved by appointment of an Equity Committee….The addition of an Equity Committee will add negligible additional burden when weighed against the size of the Debtors’ estate and the significant fees already being paid each month by the estate, while ensuring that the holders of Peabody equity receive fair representation.”
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