Mr Cooper Group Inc (COOP)

[thepennyguy]

ARTICLE: Looking Out For Shareholders: The Role of the Equity Committee in Chapter 11 Reorganization Cases of Large, Publicly Held Companies. *

Author
Thomas Henry Coleman and David E. Woodruff **
Excerpt
I. INTRODUCTION

At first glance, the lot of shareholders in chapter 11 reorganization cases of large, publicly held companies seems bleak. After investing millions or even billions of dollars in the company, these shareholders find their interests relegated to the financial cemetery under the regimen of the absolute priority rule. 1 Moreover, unlike the company's creditors, who are granted automatically a major role in the reorganization process through the official committee of unsecured creditors ("creditors' committee") and its professionals, the typical small shareholder lacks the resources to defend his or her interests. Fortunately, the Bankruptcy Code provides a champion for these shareholders-the official committee of equity security holders ("equity committee"). By collectively representing all shareholders, the equity committee and its professionals provide shareholders with meaningful access to the reorganization process, and an equal opportunity to preserve their financial interests. 2

Unlike creditors' committees, whose appointment the Code requires in every chapter 11 case, 3 equity committees are relatively rare. They are typically appointed only in the "mega-cases," involving large, publicly traded debtors, in which equity committees may represent large numbers of shareholders and huge collective interests.

The role of the equity committee in these cases is quite different from that of the creditors' committee, and warrants a separate discussion. This article examines the distinct role of the equity committee, and discusses issues relating to the formation, composition and dissolution of the equity committee, its employment and compensation of professionals, reimbursement of expenses of the committee and its members, the legal ...


I think this applies! and we are "MEGA CASE"