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Allied equity holders call plan unconfirmable, not proposed in good faith
By Caroline Salls
Pittsburgh, March 29 - Allied Holdings, Inc.'s informal equity committee objected to the disclosure statement for the company's plan of reorganization, saying the disclosure statement relates to an unconfirmable plan that was not proposed in good faith, according to a Wednesday filing with the U.S. Bankruptcy Court for the Northern District of Georgia.
The committee said the disclosure statement is "largely non-substantive boilerplate and replete with conclusory allegations that are materially misleading."
According to the objection, the reorganization value analysis is a "bare" analysis that was prepared by a firm that appears to be a stranger to Allied's Chapter 11 case, instead of by its financial adviser.
In addition, the committee said the disclosure statement fails to provide adequate background on the company's Chapter 11 case and details and history of its negotiations with the Teamsters, including Yucaipa's role in the negotiations and its relationship with the union.
"Was a behind the scenes deal cut between Yucaipa and Jimmy Hoffa Jr., et al?" the committee asked in the objection.
The committee also said the statement should disclose that there are alternatives to the plan, which are a matter of public record.
The equity holders said a plan term sheet proposed by Sopris Partners provides for equal or better recoveries for every creditor class, better treatment for labor and a material distribution to stockholders.
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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