In a recent ruling, a US Bankruptcy Court judge determined that law firms who previously represented a now-defunct talc supplier, affiliated with Berkshire Hathaway Inc., can address their stakeholder interests via mediation. The formation of an official creditors’ committee, the firms argued for, was denied.
Fox Rothschild LLP, among other law firms and advisers previously working for Whittaker, Clark & Daniels Inc, claim that they are owed a considerable amount of around $14 million. They are seeking a more influential role in influencing the company’s bankruptcy proceedings. To achieve this, they petitioned the US Bankruptcy Court for the District of New Jersey to appoint an official committee of general unsecured commercial creditors in February. This arose from their concerns around how any settlement sums would be dispersed amongst tort claimants.
The judge has indicated he will take into account the US bankruptcy watchdog’s concerns. He also held that forming an official law-firm committee would duplicate the work of the mediation process, undermining its efficiency and effectiveness.
The full details of this ruling and its implications can be found on Bloomberg Law.