The U.S. Bankruptcy Court issued an order denying appointment of an official committee of equity security holders to the SunEdison case.
The order states, “Following submission of several letters requesting the appointment of a committee to represent the shareholders of Debtor SunEdison, the Court issued an order on May 20, 2016, directing interested parties to show cause why an official committee of equity security holders (‘Equity Committee’) should not be appointed….Based upon the evidence adduced at the hearing, the Court concludes that the appointment of an Equity Committee is not necessary at this time to assure the adequate representation of equity security holders. Should circumstances change; the shareholders may renew the motion.”
As previously reported, in its June 5, 2016 statement in support of an official equity security holders’ committee, certain holders of SunEdison’s common stock had argued, “Chapter 11 debtors are not expected to protect shareholders because conflicting concerns often arise making it difficult for such directors and management to follow the best course for non-insider public shareholders….Here, the Debtors’ prepetition conduct and self-interested dealings have generated much scrutiny. Given the numerous allegations of misconduct, admitted lack of meaningful internal controls and complex, competing interests of stakeholders all over the capital structure, the Debtors cannot be relied upon to zealously advocate for the interests of Equity Holders.”
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