OCA's official committee of equity holders, U.S. Trustee object to motion to disband committee

By Jennifer Lanning Drey

Eugene, Ore., July 17 - OCA Inc.'s official committee of equity security holders and the U.S. Trustee each filed an objection to Bank of America's motion asking the court to disband the official committee of equity holders, according to two Monday filings with the U.S. Bankruptcy Court for the Eastern District of Louisiana.

According to the motion filed by the equity security holders committee, the U.S. bankruptcy code does not authorize judicial review of the U.S. Trustee's appointment of an equity committee.

The motion filed by the U.S. Trustee said the committee is needed because of the size and complexity of the case and the significant number of shareholders involved.

The U.S. Trustee also said the committee has a role because most of OCA's shareholders are individuals who hold a small number of shares, according to the motion.

"When debt is widely held, committee representation is necessary to insure the shareholders are adequately represented," it said.

In addition, the filing said financial datas show that OCA is not hopelessly insolvent and that factors such as the timing of the request for a committee favor the appointment of the equity committee.

The filing also said that shareholders are not adequately represented by other parties.

Bank of America, the administrative agent for the pre-petition and post-petition secured lenders in the Chapter 11 case, previously said the committee should be disbanded because it is unlikely that there will be a meaningful recovery for shareholders.

Bank of America also said the court should disband the committee because OCA's equity security holders are not entitled to a distribution under the absolute priority role.

The committee is comprised of Paul Burgon of NightWatch Capital Management, Provo, Utah; David Shuldiner of Kanagawa Holdings LLC, New York; Daniel J. Arbess of Xerion Capital Partners LLC, New York; Adrian J. Costanza, Revere, Mass.; and Charles Stewart, Fort Worth, Texas.

OCA, a Metairie, La., provider of business services to orthodontic and dental practices, filed for bankruptcy on March 14. The Chapter 11 case number is 06-10179.

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