Article
QVC Preferred Shareholders Seek Emergency Appointment of Equity Committee, Challenge $400M Intercompany Claim
Relevant Document:
Motion
A group of preferred equity holders in the QVC Group debtors’ chapter 11 case filed an emergency motion this evening seeking the appointment of an official equity committee to represent their interests, arguing the company’s proposed prepackaged reorganization plan would wipe out hundreds of millions of dollars in company value they say rightfully belongs to them.
The motion, filed by Cygnus Capital, William Pulman and Kevin Barnes, targets a $400 million intercompany claim that QVC Group’s subsidiary, QVC Inc., would assert against the parent company under the prepackaged plan — a claim the preferred holders say appeared nowhere in the company’s public disclosures, including a form 10-K filed just one day before the April 16 bankruptcy petition.
The equity holders argue that debtor QVC Group is likely solvent and holds significant assets — approximately $195 million in cash and a 62% stake in Cornerstone Brands Inc. — and carries no funded debt of its own, yet the plan would allocate all distributable value to subsidiary creditors while leaving preferred shareholders “with nothing.” They further claim the debtors’ own liquidation analysis shows approximately $168 million would remain for preferred shareholders if the intercompany claim is disallowed.
The movants say they recently contacted the U.S. Trustee directly to request the equity committee appointment, and claim they “are aware of at least six other Preferred Shareholders who have made similar requests to the U.S. Trustee to date,” but the UST “has not yet taken a position” on the matter.
With a plan confirmation objection deadline of May 19 and a combined confirmation hearing set for May 26, the movants are seeking a court order by May 1 directing the UST to appoint the committee.
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