Penn Virginia Corp. (fka PVAHQ)

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A small group of the largest shareholders in a company formed to represent all other shareholders during a company's bankruptcy trials. An official committee of equity security holders is typically made up of several of the largest shareholders of a company who stand to have the most to gain or lose during the bankruptcy proceedings, thus would serve as the best proxy for the shareholders as a whole.

Read more: Official Committee Of Equity Security Holders Definition | Investopedia http://www.investopedia.com/terms/o/official-committee-of-equity-security-holders.asp#ixzz4GYF1zoY3

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Penn Virginia Reaches Settlement With ShareholdersFont size: A | A | A
3:41 PM ET 8/2/16 | Dow Jones
By Lillian Rizzo

Penn Virginia Corp. struck a deal with shareholders to stave off a possible battle over the oil and gas explorer's restructuring.

In a letter to the judge overseeing the case, Penn Virginia's lawyer said it reached "a comprehensive settlement" with shareholders and would file a revised version of its restructuring plan this week.

The settlement puts to rest the shareholders' call for the appointment of an official committee to represent their interests in the case, which would have required Penn Virginia to foot the bills of the shareholders' lawyers and other advisers.

Court papers show the shareholders withdrew their request for a committee on Monday. Shareholder lawyers declined to comment on Tuesday.

The company's current reorganization plan would cancel its existing shares, leaving investors without any payment. Bankruptcy laws generally bar shareholders from recovering any of their investment unless all a company's creditors are paid.

Last month, Penn Virginia's shareholders sought official committee status so they could investigate the alleged "disappearance of $2.7 billion in value represented by the debtors to the investing public just a year and a half ago."

The shareholders also asked for further documents related to the company's valuation to determine if they really would be "out of the money" at the end of the restructuring.

A hearing on the shareholders' request for committee status was scheduled for this month. Previously, however, Judge Keith Phillips of the U.S. Bankruptcy Court in Richmond, Va., denied the shareholders' call for Penn Virginia to turn over more documents to the shareholders, citing the additional cost to the company.

While the investor group said it expected the cost for producing the documents to run between $200,000 and $500,000, Penn Virginia estimated it would cost $922,805.

Penn Virginia filed for chapter 11 protection in May after negotiating a restructuring deal with lenders. It halted drilling and performed a series of layoffs and other cost-cutting measures because of plummeting oil and gas prices. The Radnor, Pa., company is one of the largest oil and natural gas drillers in the Eagle Ford region, and drills in Oklahoma and Pennsylvania's Marcellus Shale.