Genco Shipping & Trading on Thursday defended its proposed plan to exit bankruptcy on the first day of a trial over accusations by shareholders that it is undervaluing its assets. At a hearing in federal bankruptcy court in Manhattan, a lawyer for Genco, a dry bulk shipper that filed for Chapter 11 in April, said the plan protects all stakeholders, equity included. “Equity wants to have their cake and eat it too,” Bradley O’Neill, the lawyer, told Judge Sean Lane. Shareholders have panned the plan because of what they see as a paltry payout, about $30 million in warrants. The federal government as well has objected to the plan on unrelated grounds. The equity holders include Aurelius Capital Management and other sophisticated hedge funds known for buying distressed debt and litigating to boost their payouts. Decreased charter rates and general volatility in the shipping market pushed Genco into bankruptcy with about $1.3 billion in debt. Under a restructuring supported by its creditors, Genco would give secured lenders 81 percent of its post-bankruptcy ownership. Convertible noteholders would get 8.4 percent of the equity and a chance to participate in a rights offering that would raise $100 million in new capital for Genco. Shareholders said in court papers last week that Genco “engineered an unreasonably low valuation” in a ploy to enable management and creditors control the company. Genco board member Harry Perrin was one of three witnesses to testify on Thursday, though questioning lasted only two hours and the bulk of evidence is expected to come from testimony later this month from valuation experts. The trial is scheduled for Thursday and Friday, as well as June 23 and 24. There is no love lost between the shareholder committee and Genco. The company last month asked its bankruptcy judge to abolish the committee altogether, although he has not ruled yet. Genco at the time argued the committee, whose professional fees are paid by Genco, was essentially forcing the company to subsidize litigation against it. The company has said equity holders should be pleased to recover anything because most corporate bankruptcies wipe out common shareholdings. The federal government, through the Department of Justice’s bankruptcy regulatory arm, objected to Genco’s restructuring plan over perks it would provide to supporting creditors, namely payment of legal fees and releases from legal claims.