Basically, the Committee of Creditors in the Syms bankruptcy case are petitioning the court to disband the Equity Committee of Shareholders (.pdf).
This petition is absurd in my mind. While the shareholder's committee will rack up various fees and such that will go against any pay out that I, as a shareholder will get, let's look at the facts:
1) The Committee of Creditors make the claim that shareholders are already represented by management in this case, due to Marcy Syms' control of more than 1/2 the company, along with the fact that she has a fiduciary duty to shareholders.
While it is true that management does control a lot of the company and should defend shareholder interests, I don't exactly have the most faith management to do a great job on my behalf... After all, they did manage to make not one, but 2 time tested retailers end up in bankruptcy (despite owning a huge amount of their buildings and operating in them rent free). Furthermore, it is noted that Syms' management had elisted the help of various firms when exploring strategic alternatives. I have no reason to think that they will defend my interests from any odd dealings where Syms management has had previous discussions with them.
Furthermore, when there is more or less an ongoing case to determine if there was any wrong doing on the part of management, it seems that the honoring of management's fiduciary duties is in question.
2) The Committee of Creditors claim that a lot of what the Equity Committee would do would simply be duplicating what is already being done in the court.
The Equity Committee members have likely already paid for themselves and can continue to do good things for all involved in the case. In the linked story, creditors and shareholders objected to a part of the liquidation and negotiated better terms- it stands to be a reasonable assumption that the members of the committee were involved in this negotiation.
3) The Committee of Creditors ultimately don't give a damn about shareholders: once they get paid their claims (which will be quite easy to do, especially since in court, it has been said that Syms shareholders are likely "in the money"), they have absolutely no economic interest in getting shareholders everything that is possible. As such is the case, they may be less inclined to fight tooth and nail for better terms in the ongoing liquidation. The shareholder committee however, will do this as they represent everybody that sits outside of Syms and the people that they have dealt with on a nearly daily basis (being their creditors, landlords, and advisors).
Disclosure: I am long Syms. This is not advice of any kind. I reserve the right to change my position(s) at any time. Always do a ton of your own research in regard to anything that I say, do, write, or so much as even think about.