By: E&P Staff
In a Sept. 22 hearing over allegations that one of the law firms for Tribune Co.’s unsecured creditors has too many conflicts to represent them, the judge overseeing the Chapter 11 reorganization ruled that Chadbourne & Park LLP may remain the unsecured creditors committee’s lead law firm during mediation slated to begin Sept. 26.
U.S. Bankruptcy Judge Kevin Carey, in Wilmington, Del., denied a request by low-ranked creditors to replace the firm, according to Bloomberg.
The mediation aims to craft a reorganization plan acceptable to unsecured creditors who do not want to be left with no payment, senior lenders poised to take over the company, and current and former managers who could be held responsible for the alleged “fraudulent conveyance” of Tribune’s $8 billion 2007 leveraged buyout – almost exactly one year before Tribune petitioned for bankruptcy protection.
At least two of the seven-member committee of unsecured creditors wanted Chadbourne & Park removed because it also represents senior lenders such as JPMorgan Chase in other matters. Those two committee members asked that Chadbourne & Park be replaced with the group’s other law firm, Zuckerman Spaeder LLP.
A day after Judge Carey asked creditors to try to divide mediation duties between the two firms, Chadbourne attorney Howard Seife said in court that they could reach no such agreement, Bloomberg reported.