aaiPharma shareholder seeks appointment of equity committee amid valuation dispute

By Caroline Salls

Pittsburgh, Nov. 2 - aaiPharma Inc. shareholder Frederick D. Sancilio requested the court direct the company's U.S. Trustee to appoint an official committee of equity security holders for its Chapter 11 case to represent shareholders in company valuation issues, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Sancilio, the company's founder and former chief executive officer, said based on financial projections he received as a member of aaiPharma's board of directors, the company's estate has sufficient assets to pay all creditors in full and provide a "meaningful recovery" to the company's thousands of public shareholders.

"Simply put, these cases cry out for the immediate appointment of an equity committee to adequately represent and protect [aaiPharma's] public shareholders," the motion said.

"Tellingly, the [company's] senior noteholders have threatened the company's directors with personal liability should the directors support any valuation which shows equity to be 'in the money.' "

Sancilio said the noteholders are demanding that the company be handed over to them.

A hearing is scheduled for Nov. 21.

aaiPharma, a Wilmington, N.C., pharmaceutical company, filed for bankruptcy on May 31. Its Chapter 11 case number is 05-11341.

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