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Allied Holdings stockholders' new equity committee appointment hearing request denied
By Caroline Salls
Pittsburgh, April 13 - Allied Holdings, Inc. common stockholders' request for a new hearing on their motion for appointment of an official committee of equity security holders in light of new evidence was denied Friday by the U.S. Bankruptcy Court for the Northern District of Georgia.
The stockholders requesting the new hearing included members of the Rutland family, who hold roughly 30% of Allied's common stock.
As previously reported, the shareholders' original motion for appointment of an official equity committee was denied in February 2006 and a renewed motion was denied on March 13.
According to the motion, when the hearing on the renewed motion was held, only the counsel for Yucaipa American Alliance Fund I, LP and Yucaipa American Alliance Parallel Fund I, LP knew that Yucaipa had been negotiating with representatives of the International Brotherhood of Teamsters to obtain a labor contract that would support the plan of reorganization Yucaipa planned to file in this case.
In addition, the motion said that had Robert Rutland known of the secret term sheet, the Sopris plan of reorganization proposal and the failure of the board of directors to protect existing equity by acting to terminate the company's exclusivity period, he would not have testified that the board was protecting the rights of existing equity.
Instead, the shareholders said Rutland would have adamantly testified that the board of directors was not representing the interests of existing equity.
In addition, the Rutland family said if evidence would have been available on Yucaipa's plans, the court may have agreed that appointment of an official equity committee was necessary for Allied's Chapter 11 case.
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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