Mirant, shareholders spar over bankrupt company's worth

<p>Mirant Corp. and its shareholders sparred Monday over how much the bankrupt energy supplier is worth, a key factor in determining whether those people who owned stock in the company will get any money back when it reorganizes.</p><p>The Atlanta-based company believes it has an enterprise value of $7 billion to $8.3 billion on assets and liabilities of $11.4 billion each.</p><p>Major shareholders argue that the company is worth roughly $16 billion and note that when Mirant filed for bankruptcy on July 14, 2003, it listed $20.6 billion in assets and $11.4 billion in liabilities.</p><p>If Mirant's plan holds, stock issued prior to the Chapter 11 filing will effectively be wiped out. The plan does call for shareholders who vote for the plan to receive warrants giving them the right to purchase shares in the reorganized company at a price to be specified later.</p><p>The final decision on the company's value will be made by U.S. Bankruptcy Judge D. Michael Lynn, who oversaw the beginning of a weeklong hearing Monday to discuss the issue.</p><p>Shareholders who rallied outside the hearing in Fort Worth, Texas, said Mirant's plan offers them little comfort.</p><p>Paul Syiek, a business owner from Norcross who owned more than 300,000 Mirant shares before the company filed for bankruptcy, said Mirant is drastically undervaluing the company to pay off creditors at the expense of shareholders.</p><p>"They're calling themselves an honest broker of this deal, and we don't believe that is the case," Syiek said by telephone from outside the courthouse.</p><p>Another large shareholder who was at the rally, Mark Adams of Austin, Texas, said he lost hundreds of thousands of dollars when Mirant's stock plummeted amid the bankruptcy filing. He said he would like some of it back, calling Mirant's valuation plan "egregiously wrong."</p><p>Mirant spokesman Lloyd Avram said the company has been supportive of the valuation hearing and has acted openly with all parties in preparing for it.</p><p>"The hearing will allow the judge to rule on the valuation and clear the air over the matter," Avram said.</p><p>Lawyers in the case planned to call valuation experts during the multi-day hearing.</p><p>During Monday's session, a Mirant lawyer said the company is just as interested as equity holders in maximizing the value of the company. At the same time, the lawyer said Mirant wants to make sure that it is "not held hostage by people who have nothing to lose and everything to gain" from putting forth an inflated value for the company.</p><p>The Securities and Exchange Commission has filed an objection to Mirant's reorganization plan, saying it improperly releases from liability third parties, including present and former Mirant officers and directors, to the detriment of public investors. The SEC says in court papers that it believes the plan is unconfirmable.</p><p>Mirant's bankruptcy was the 11th largest in U.S. history at the time of the filing.</p><p>Mirant, a spinoff of Southern Co., had 7,000 employees at its height. Court papers say its employee ranks had dwindled to 4,700 as of Dec. 31.</p>