Court denies Tronox creditors' request to dissolve equity committee

By Rebecca Melvin

New York, April 7 - Tronox Inc.'s creditors' request to dissolve the company's official committee of equity security holders was denied Tuesday by the U.S. Bankruptcy Court for the Southern District of New York.

The creditors committee had alleged that appointment of the equity committee was not warranted because Tronox is "hopelessly insolvent."

But the U.S. Trustee, which appointed the equity committee, said in court filings that there were many unknowns that may impact on solvency, including the possible subordination, reduction, or elimination of environmental and retiree claims, as well as the potential recovery in any litigation the estate may bring against its former parent company Kerr-McGee Corp. or Anadarko Petroleum Corp., which merged with Kerr-McGee in August 2006.

In addition, the cases are large and complex and a plan has not been filed, so an equity committee could assist in a plan.

"Now that the equity committee has survived, we are going to work cooperatively with the other constituencies in the case," equity committee counsel David Crichlow of Pillsbury Winthrop told Prospect News after the hearing.

According to the U.S. Trustee's court documents, Tronox had 19,107,367 shares of class A common stock and 22,889,431 shares of class B common stock outstanding as of Dec. 31.

Tronox, an Oklahoma City-based producer and marketer of titanium dioxide pigment, filed for bankruptcy on Jan. 12. Its Chapter 11 case number is 09-10156.

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