Investors ask bankruptcy court to order Mirant to hold meeting to oust board

<p>Some of Mirant Corp.'s shareholders asked a bankruptcy court Monday to order the energy supplier to hold a meeting to oust its board of directors for pressing a business plan as part of its reorganization that understates projected revenues.</p><p>A committee representing equity holders filed a motion in U.S. Bankruptcy Court in Fort Worth, Texas to compel the Atlanta-based company to hold a meeting of investors, which the committee says Mirant is supposed to hold every year but hasn't in 18 months.</p><p>The motion seeks to have the entire eight-member board replaced. There was no immediate ruling by the court.</p><p>"Members of the board have repeatedly and materially breached their fiduciary obligations to its shareholders," the motion says.</p><p>The shareholders committee says Mirant's board has allowed management to press a business plan that "grossly understates projected revenues" and ignores significant assets of value.</p><p>The motion says the move is part of an effort to curry favor with creditors by artificially depressing the company's enterprise value, which could affect how much, if anything, shareholders are paid when the bankruptcy case concludes.</p><p>"The creditors, of course, have a powerful economic interest in pressing a valuation that does not exceed the total of claims against the debtors," the motion alleges. "If such a valuation is, in the end, accepted, the creditors would receive all of the equity in the reorganized debtors ... while the shareholders would be wiped out."</p><p>Mirant spokesman James Peters said he needed to read the motion before commenting. The motion says Mirant's last shareholder meeting was on May 22, 2003. Mirant has not yet filed a reorganization plan, the motion says.</p><p>Mirant filed for bankruptcy protection from its creditors on July 14, 2003. At the time, it had roughly 7,000 employees.</p><p>In August, Mirant said it hopes to emerge from bankruptcy in the first half of next year. At the time, Mirant expanded chief financial officer Michele Burns' duties to include chief restructuring officer, making her the company's primary representative in the bankruptcy process.</p><p>Burns joined Mirant in May after serving as chief financial officer at Atlanta-based Delta Air Lines Inc.</p>

http://accesswdun.com/article/2004/11/156247