1) There has been no response by the equity committee. However, the footnotes to docket #s 1067 and 1071 indicate that the EC does not fully support the current iteration of the rights offering procedures. What is not known is the exact reason why. It could simply be that some of the members of the EC don't hold positions large enough to subscribe to the Rights Offering under the current terms. Since they are "over the wall" they can't trade so they may be seeking to get the minimum of $35,000 reduced so they can all participate. I don't know for sure, that is just one possible reason why. Color me curious and skeptical at the same time.
2) Not sure what the Trustee's posture is at this point. Most likely we won't see any objections from the EC, Trustee or any other parties until the Disclosure Statement objection deadline on Feb 8th. We may see some other objections on Feb 9th to the Debtor's motion to approve the adequacy of the DS. Most objectors wait until the last minute. In this case there was an objection to the Plan that was filed within 12 hours after the Plan was filed, so who knows.
3) I believe March 21st is the deadline to object to the POR. I advise getting it in earlier than that though and that is for this case and for all cases. I believe in some jurisdictions even an e-filed doc is deemed to be filed one day after its release. In this case the Debtors are going to try and get the court to dismiss any and all objections based on technicalities because they cannot defeat any argument regarding 1123(a)(4) on its merits. They have to resort to more creative measures like " reasonable exercise of business judgment" or any of the other excuses they have thrown out in the last few days.
There are a lot of people that are fairly upset about what has transpired over the years. These funds are attempting to swoop in at the 11th hour and steal the $35 million settlement funds, recapitalize the new company with those funds, and then only offer a mere pittance of 30% of the reserve trust that MAYBE gives shareholders some recovery years down the road.
If that is the final result, I wouldn't be surprised if those shareholders don't organize to petition the SEC, and Justice Department en masse to ensure that the $185 million clawback never gets into the hands of the holders of new company stock. The SEC is already leaning that way as they have already objected to the plan supporters telling the SEC what to do with that money. Probably wouldn't take too much public outrage to convince the U.S. Government to find an alternative use for the $185 million in funds. They could always go back into the transfer records and issue the funds to the people who are truly aggreived as opposed to giving it to the funds that used estate resources and their own committee positions to cleverly devise a plan that serves their own "pecuniary interests".
The simple fix is to open the rights offering up to all shareholders and make the new company public. I doubt anyone objects to the Plan Supporters taking a few liberties here and there if the rights offering terms were actually fair but when the end result (for a class 6 or class 7 holder) is not materially different from the zero recovery that would have resulted from a credit bid under a section 363 sale it opens up the possibility that an ultimatum game is in the offing.
I am just wondering if this thing had gone to auction would the $35 million settlement have been rejected? I don't remember the rejection coming into play until these new funds swooped in. Might class 6 claimants argue they were better off under the old terms? Might this be the reason the Plan Supporters are seeking court approval for indemnification?
I could go on and on...
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