AbitibiBowater, creditors object to official equity committee request

By Caroline Salls

Pittsburgh, July 28 - AbitibiBowater Inc. and its official committee of unsecured creditors objected to a motion for appointment of an official equity holders committee for the company's bankruptcy case, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The company said the shareholders who asked the court to appoint the committee has not proven that an equity committee is necessary or appropriate.

AbitibiBowater said the U.S. trustee denied the shareholders' request to appoint an equity committee more than three months ago.

The company said its proposed reorganization plans "represent a careful balance among the competing interests of multiple creditor groups, both in the U.S. and in Canada, and reflect extensive negotiations that led to the current consensus in support of the plans."

In addition, the company said it is "hopelessly insolvent," and the shareholders have not offered any credible evidence of AbitibiBowater's solvency or any likelihood that they would be entitled to a meaningful distribution.

The committee echoed the company's insolvency argument and said the shareholders have not shown that they are not already well represented in AbitibiBowater's bankruptcy case.

According to the committee's objection, appointment of another official committee "would result in duplication of the committee's efforts at a significant cost to the debtors' estates and at a critical juncture when the debtors' cases are on track to emerge from Chapter 11."

A hearing is scheduled for Aug. 4.

AbitibiBowater, a Montreal-based producer of newsprint, commercial printing papers, market pulp and wood products, filed for bankruptcy on April 16, 2009. Its Chapter 11 case number is 09-11296.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.