Granite Broadcasting preferred equity holders seek appointment of official committee

By Caroline Salls

Pittsburgh, Dec. 29 - Granite Broadcasting Corp.'s preferred equity holders requested appointment of an official committee of preferred equity holders for the company's Chapter 11 case, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, Granite's case represents a classic example of secured creditors, Silver Point Finance LLC and other holders of pre-bankruptcy secured debt "attempting to grab upside equity value rather than simply seeking to be paid in full."

The preferred equity holders said the case is controlled by chief executive officer W. Don Cornwell, who is also the chairman of the company's boards of directors and "the shareholder with exclusive and absolute voting control, who is prepared to facilitate the windfall to the pre-petition secured lenders, at the expense of the holders of the preferred equity, in return for a payoff in the form of all types of undue and improper consideration."

Also, the preferred equity holders said the estates have "no fiduciary with undivided loyalties to advocate on behalf of the preferred equity holders," and there is not even an official committee of unsecured creditors for Granite's case.

Granite, a New York-based owner and operator of network-affiliated television stations, made a prepackaged Chapter 11 filing on Dec. 11. Its Chapter 11 case number is 06-12984.

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