No Official Equity Committee Was Required Where It Was Unlikely Equity Would Receive Any Distribution And Where Equity Holders' Interests Were Already Sufficiently Represented
US Concrete, Inc., Case No. 10-11407 (PJW) (June 21, 2010) (J. Walsh)
In this case, the Court denied the Ad Hoc Equity Committee’s (“AHEC”) motion to appoint an official committee of equity holders because the Court was not convinced equity holders would receive any recovery and because the Court felt the equity holders did not require any additional representation. In determining whether to appoint an official committee of equity holders, a court considers two factors: (a) whether there is a substantial likelihood that equity holders will receive a meaningful distribution under a strict application of the absolute priority rule, and (b) whether equity holders were able to represent their interests without an official committee. The Court held in favor of the objectors on both counts.
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