Advertisement

Dolan Committee Disbandment Sought, Shortening Notice Filed

Advertisement

Dolan filed with the U.S. Bankruptcy Court a motion for entry of an order (a) disbanding the official committee of equity holders appointed by the United States Trustee and (b) granting related relief. The Debtors explain, “The U.S. Trustee’s decision to appoint the Equity Committee will only result in significant harm to the Debtors’ estates. In addition to the needless expenditure of the Debtors’ very limited liquidity, an Equity Committee will no doubt seek to substantially delay these proceedings. Such a delay would jeopardize the fully solicited and creditor–approved Plan –– which preserves the Debtors’ businesses as going concerns, protects approximately 635 jobs, and provides for a full recovery to general unsecured creditors who would otherwise be substantially out of the money –&#8211 because the Lenders have the ability to terminate both the Restructuring Support Agreement and the DIP Credit Agreement if the Debtors are unable to emerge from chapter 11 by May 22, 2014 for any reason. Moreover, the Debtors’ equity holders do not need an official committee to be adequately represented. Not only do the Debtors have a duty to maximize the estates’ value, but several equity holders have already retained counsel to represent their interests –&#8211 including by writing a letter to the U.S. Trustee requesting the appointment of an official equity committee –&#8211 confirming that equity holders are able to act collectively and represent their interests in the absence of a committee. And if any equity holders were to provide substantial contribution to the Debtors’ chapter 11 cases, they would be entitled to seek compensation pursuant to section 503(b) of the Bankruptcy Code, even without a formal committee. Accordingly, the Debtors respectfully submit that the U.S. Trustee’s decision was unwarranted and the Equity Committee should be disbanded.” Subsequently, the Debtors filed with the Court a motion to shorten notice and scheduling hearing with respect to Debtors’ motion for entry of an order (a) disbanding the official committee of equity holders appointed by the united states trustee and (b) granting related relief.

More on The Dolan Company

Leave a Reply

Your email address will not be published.