EXIDE BANKRUPTCY UPDATE – Exide shareholders lose bid for bigger role in bankruptcy
Exide Shareholders Lose Bid for Bigger Role in Bankruptcy
Shareholders of Exide Technologies, the 125-year-old battery maker, are close to being wiped out and don’t need a court-approved committee to help them fight a reorganization plan that would pay them nothing, a judge said.
U.S. Bankruptcy Judge Kevin Carey ruled today that shareholders shouldn’t be given an official committee, with legal bills paid by Exide, because they didn’t present evidence that the company is worth enough to pay all its debts and still have something for them.
“It appears that equity is on the verge of being wiped out again,” Carey said in federal court in Wilmington, Delaware. “I understand the frustration.”
Exide, based in Milton, Georgia, filed for bankruptcy last year after state regulators shut down its lead-recycling plant in Vernon, California. The closing forced Exide to speed up its restructuring plans (XIDE:US) by hiring law firm Skadden, Arps, Slate, Meagher & Flom LLP and financial adviser Alvarez & Marsal North America LLC, according to court records.
This is Exide’s second trip through bankruptcy. The company reorganized in 2004, winning court permission to eliminate $1.3 billion in debt in exchange for giving lenders about 90 percent of its stock. The other 10 percent went to unsecured creditors.
Carey also presided over the first bankruptcy, in which shareholders were wiped out.
Company officials and creditors opposed the shareholders’ request for an official committee. Such panels are rare in bankruptcy. Judges typically allow them only when there’s a chance shareholders will recover something after all creditors are paid in full.
The case is In re Exide Technologies, 13-11482, U.S Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Steven Church in Wilmington, Delaware at firstname.lastname@example.org
To contact the editors responsible for this story: Andrew Dunn at email@example.com Charles Carter