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Allied Holdings shareholders' second official committee appointment request denied
By Caroline Salls
Pittsburgh, March 13 - Allied Holdings, Inc. stockholders' renewed request for appointment of an official committee of equity security holders for the company's Chapter 11 case was denied Tuesday by the U.S. Bankruptcy Court for the Northern District of Georgia.
In the renewed motion filed in October, the shareholders said they are not adequately represented and the company is not "hopelessly insolvent."
In his order denying the renewed motion, judge C. Ray Mullins said the shareholders were not able to prove that they are not adequately represented.
Mullins said the shareholders could not prove that the cost of an additional committee in Allied's Chapter 11 case will not outweigh the benefits.
Since the shareholders could not prove that they are not being adequately represented, Mullins said he did not need to rule on whether or not the company is "hopelessly insolvent."
In February 2006, stockholders Guy W. Rutland III, Guy W. Rutland IV and Robert J. Rutland's original request for appointment of an official equityholders committee was denied.
This latest motion was made by Virtus Capital LP, Hawk Opportunity Fund, LP, Aspen Advisors, LP, Sopris Capital Advisors, LLC and Armory Advisors and was supported by the Rutlands.
According to the renewed motion, Allied Holdings' financial position has improved substantially since January 2006, and the court invited this resubmission if events warranted, which the shareholders said they clearly do.
Allied, a Decatur, Ga., distributor of new and used vehicles, filed for bankruptcy on Aug. 1, 2005. Its Chapter 11 case number is 05-12515.
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