Rosen is going to depose the EC members because he hopes to show "clear abuse" of the bankruptcy process by the EC under the Johns-Manville and Marvel cases. Rosen already telegraphed that he would be deposing the Equity Committee members. Remember the April 19, 2010 hearing where we sought relief from the automatic stay to file for a shareholders meeting?
Here's the colloquy:
April 19, 2010 hearing at 55:30 (and following ... this is a very rough take):
THJMW: "Marvel and Johns-Manville make it clear ... in order to enjoin shareholders, the courts look to whether there is clear abuse ... there is none shown on the record ... before the debtor files any motion to enjoin and makes me have a hearing, it is clear that you need more than the shareholders disagree with what the debtors have done..." (goes on to discuss Manville)
"The mere desire to get more bargaining power is not enough ... it's not enough that they want to elect board members who have a different opinion as to how the bankruptcy case should proceed. I don't find any basis to find clear abuse or any basis to stop the shareholders from exercising their state law rights."
"So ... I guess that's a ruling ..."
Rosen: "Your honor, we will be going forward though with our expedited discovery then to seek to have this thing heard on the merits...including our counterclaim."
THJMW: “All right ..."
Now, here's a snippet from the Marvel decision showing what constitutes "clear abuse":
"It is well settled that the right of shareholders to compel a shareholders' meeting for the purpose of electing a new board of directors subsists during reorganization proceedings. In re Johns-Manville Corp., 801 F.2d 60, 64 (2d Cir. 1986). The right of shareholders "to be represented by directors of their choice and thus to control corporate policy is paramount." In re Potter Instrument Co., Inc., 593 F.2d 470, 475 (2d Cir. 1979) (quoting In re J.P. Linahan, Inc., 111 F.2d 590, 592 (2d Cir. 1940)). Shareholders, moreover, "should have the right to be adequately represented in the conduct of a debtor's affairs, particularly in such an important matter as the reorganization of the debtor." Johns-Manville, 801 F.2d at 65 (quoting In re Bush Terminal Co., 78 F.2d 662, 664 (2d Cir. 1935)). As a result, the election of a new board of directors may be enjoined only under circumstances demonstrating "clear abuse." See, e.g., Johns-Manville, 801 F.2d at 64; In re Heck's Properties, Inc., 151 B.R. 739, 759-60 (S.D. W. Va. 1992); In re Allegheny Internat'l, Inc., 86 Bankr. 466, 1988 WL 212509, at * 4 (W.D. Pa.1988). "Clear abuse" requires a showing that the shareholders' action in seeking to elect a new board of directors "demonstrates a willingness to risk rehabilitation altogether in order to win a larger share for equity." Johns-Manville, 801 F.2d at 65. The fact that the shareholders' action may be motivated by a desire to arrogate more bargaining power in the negotiation of a reorganization plan, without more, does not constitute clear abuse. Id. at 64.
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So I'm pretty sure that's the "why" behind the deposition notices for the EC. Shows that Rosen didn't learn a thing from yesterday's debacle, doesn't it?