Mirant Corporation Shareholder Representation

The Wilson Law Firm, P.C. of Atlanta, represented various individual Mirant shareholders in Mirant’s Bankruptcy Proceeding in the United States Bankruptcy Court for the Northern District of Texas, for the purpose of advocating a higher recovery to existing shareholders than the Zero recovery which Mirant had proposed by its January 19, 2005, Plan of Reorganization for Mirant, and its subsequent revisions.

The Wilson Law Firm, P.C., represented its clients during the entire valuation hearings, which lasted for 28 days during the Spring and Summer of 2005, during the valuation implementation committee proceedings during the Summer of 2005, and in the disclosure statement and confirmation hearings following the settlement reached in September of 2005.

Ultimately, the former Mirant Shareholders achieved a recovery of a 3.75% carried interest in New Mirant, warrants representing another 10% of the common stock of New Mirant, and half of net proceeds from certain litigation that was assigned to a litigation trust. The total value of this recovery exceeded $760 million as of the January 3, 2006 date of New Mirant’s emergence from Bankruptcy.

The public markets have subsequently confirmed that The Wilson Law Firm, P.C. was correct to advocate for much higher values for Mirant, as Mirant’s post confirmation value, as expressed by the Stock Market, has nearly doubled.


Our activities following emergence have been limited to the preparation and submission of our Fee Application to the Bankruptcy Court, copies of which are available here for your review. On November 21, 2006, the Bankruptcy Court issued its fee opinion, a copy of which is also available here for your review, and which is also published at 354 B.R. 113 (2006).

The Bankruptcy Court’s fee opinion specifically recognized that “Wilson made a substantial contribution in these cases” by our active participation in the valuation hearings, where “Wilson’s efforts let the court to require recalculation of the effect of taxes on Debtors’ cash flow” and “that $357 million should be added to Debtors’ Total Enterprise Value. The recalculations of taxes would have added at least an additional $750 million in value. The $357 million represented cash that the Debtors had secreted off-shore in the Philippines subsidiary which was never in Bankruptcy. Thus by these two specific contributions, both of which were recognized by the Bankruptcy Court over $1 Billion in additional value was proven, substantially contributing to the $760 million recovery to shareholders.


The Wilson Law Firm, P.C.’s presentation also included evidence of the lowest costs of capital, other methods of valuation, and proof that neither the Debtors’ experts, nor those representing the various creditor committees, had never conducted any asset based appraisals, all of which contributed to the Bankruptcy Court’s conclusion that there had been a “gross underestimation of Debtors’ values.” Specifically, the Bankruptcy Court noted that:


“When the financial advisors occupied center stage, they failed to predict Debtorsvalue anywhere near correctly, persisted in stubbornly defending erroneous values and, thus, contributed to the need for a much longer, more expensive valuation and negotiation process that was necessary.”

Despite finding specific contributions totaling over $1 billion in additional value, the Bankruptcy Court concluded that our participation was “more gadfly than Godfather to the excellent results” and denied any award of fees, granting only $15,000 as a partial expense reimbursement.
The Wilson Law Firm, P.C., on behalf of its Mirant Shareholder clients, appealed to the United States District Court, which affirmed the Bankruptcy Court, and appealed to the Fifth Circuit United States Court of Appeals, which also affirmed.

The final conclusion is that our creation of a $760,000 recovery for Shareholders was rewarded with $15,000 of expense reimbursement, less than the cost of the hotels and airfare, which speaks volumes as to the state of Shareholder protection in United States Bankruptcy Court.

Best regards to all and our many thanks to all of you who cooperated with our efforts.

The Wilson Law Firm, P.C.
L. Matt Wilson, PrincipalDisclaimer: This information is not intended to be used as the basis of any investment decision, nor should it be interpreted as investment advice or opinion. You should not consider this information to be investment advice or opinion, and should instead seek advice from another attorney or independent financial advisor with respect to any investment in the securities mentioned herein. You should neither construe any of the information contained herein as business, financial, investment, hedging, trading, regulatory, tax or accounting advice nor make this information the basis for any investment decisions made by or on behalf of you, your accountants, or your managed or fiduciary accounts, and you should consult another attorney, your business advisor and/or tax and accounting advisors concerning any contemplated transactions. The Wilson Law Firm, P.C. takes no responsibility for any investment related actions or omisions made in reliance on the information contained herein.