Patriot Coal Corporation (fka PCXCQ)

[56Chevy]

The Trustee objected to shareholders request for an OEC. But in doing so the Trustee isn't saying Equity isn't deserving of representation or shouldn't be allowed representation, she's saying that in her opinion shareholders have adequate representation. *IMO either Equity is so far out of the money and the trustee sees an OEC as just an added cost burden to the estate ...or CompassPoint partners did a really lousy job of stating their case for an OEC. Admittedly its not easy convincing the trustee/court to appoint one! In fact its relatively rare.

Adequate Representation.

a. The statutory focus under § 1102(a)(2) is not whether equity holders are exclusively represented, but whether they are adequately represented. (The problem with this is equity holders don't know and will never know if they were or are being adequately represented...that is sort of the point :~/).

b. It is expected that management would normally represent, among other interests, the interests of equity holders. (I have always found this NOT to be the case..this is a joke 99.9% of the time... but that's how it supposed to be)

c. Under this prong the cost factor of another committee is often addressed,including whether the equity group that is seeking an official committee is primarily doing so in order for the estate to pay its professional fees. (OEC's are expensive...this one is true).

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http://www.americanbar.org/content/dam/aba/events/business_law/2011/10/business_bankruptcy/2011_business_bankruptcy_10.authcheckdam.pdf