Chemtura Corp (fka CHMT)

[Madclown]

Nice post. It is true that in most cases the creditors will try to argue that there is no value left for shareholders. It is in their best interest because if equity does remain and equity holders are removed from the equation then the creditors essentially "steal" the equity from shareholders. The hope is that you have a Trustee and a Judge that will not allow that to happen. An equity committee is very important for shareholders as they represent their interests alone, just as the creditors committee does that for the creditors. As we see the market prices of equity and debt increase, so will the chances of the formation of an equity committee.

To form an EC it usually takes shareholders banding together to retain legal counsel and forming an Ad Hoc Committee of Equity Shareholders. It will also require that there are significant equity holders willing to serve on such a committee.

If one is not formed before the POR is released and the POR is not favorable for shareholders, then we may see the larger shareholders pushing for the formation of an EC on a expedited basis. It may well be that the larger shareholders just don't think the added cost is justified, at this point. No sense throwing good money away if it is not necessary. Just remember that we have equity holders with 21 million and 11 million shares that have a lot more at risk here than the rest of us. They will take appropriate action at the appropriate time.