Syms creditors' equity committee disbanding motion denied by court

By Caroline Salls

Pittsburgh, Jan. 27 - Syms Corp. and Filene's Basement, LLC's official committee of unsecured creditors' motion to disband the official equityholders' committee appointed by the U.S. Trustee was denied Thursday by the U.S. Bankruptcy Court for the District of Delaware.

A hearing on the creditor group's alternate motion to limit the scope of the equity committee's duties and/or impose a budget on the equity committee was adjourned to March 7.

As previously reported, the creditors committee said in the disbanding motion that the debtors' management and directors own nearly 55% of Syms' publicly traded stock.

"Under applicable state law, management owes fiduciary duties to all shareholders equally and majority-controlled shareholders owe similar duties to minority shareholders," the creditor group said in the motion.

"Consequently, the interests of management and the debtors' board of directors are directly aligned with the interests of the Syms' minority equity holders."

In addition, the creditor group said the companies' management has hired a team of highly qualified counsel and advisers to represent the interests of Syms and Filene's Basement and their stakeholders, including all equityholders.

Syms, a Secaucus, N.J.-based off-price clothing retailer, filed for bankruptcy on Nov. 2, along with wholly owned subsidiary Filene's Basement, LLC. The joint Chapter 11 case number is 11-13511.

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