Bankrupt and Distressed (BAD) Research and Due Diligence

[Madclown]

VSTNQ: Currently, there are several motions on the table that might be of interest to some.

There is a motion for an official equity committee brought by a group called "Various Shareholders" who are represented by Bayard, P.A. This motion will be heard on May 12, 2010. They properly requested a committee through the trustee's office but were denied. Now they seek to bring the issue before the Judge.

There are also motions to both appoint an examiner and to terminate exclusivity brought by the "Ad Hoc Equity Committee" represented by Buchanan,Ingersol & Rooney and Dewey & Leboeuf.

In searching through the docket, I cannot find where these groups have filed the requisite 2019(a) statements to the court. As such, their motions could/should be denied on their face because they all lack standing (as a group) to even bring a motion before the court. They're all spending a lot of money only to be booted on a technicality.

Let's play devils advocate. If I am one of the parties opposing these equity groups, I let them put all their cards on the table so I see what they have up their sleeve and then if it looks like they are about to prevail I play the ultimate trump card which is the 2019(a) requirement. When/if the facts reflect that they purchased their stake in the low pennies, then I paint them as money hungry vultures attempting to hijack the reorganization process.

The lesson learned here is to follow proper procedure so that you don't give your opposition additional rope to hang you with. As an equity constituency in a bankruptcy process, the deck is stacked against you from the beginning. One need only look to the very recent RGCIQ and SIXFQ cases to see where procedural gaffes by Resilient Capital buried what might have otherwise been salient arguments.