Trustee Smells a Rat....
Zenith Trustee Opposes Equity Panel's Professional Hires
WASHINGTON (FFBN) -- Depending on one's view, the U.S. Trustee in
the Zenith Electronics Corp. case continues to function as "watchdog" or "hired hound" by being the sole objector to the official committee of equity security holders' requests to retain a financial advisor and local counsel.
In two separate Oct. 14 court filings, the trustee seeks to
reverse the bankruptcy court's Oct. 1 order allowing the committee to retain Ernst & Young LLP as its financial advisor. The committee sought Ernst & Young's services to assist with valuations, financial projections, and other financial investigations and matters
According to the trustee, this certification would have been impossible since she informed the committee's counsel of her objection on Sept. 29......
Contemporaneously with the reconsideration motion, the trustee
filed an objection setting forth the substantive objections to Ernst &
Young's retention. Among the trustee's objections is an allegation that Ernst & Young has a conflict of interest as the result of its relationship with Jay Alix & Associates pursuant to an alliance agreement.....
(( Note: Jay Alix & Assoc. is the firm LGE/Zenith hired to do the restructuring/prebankruptcy work))
In addition, the trustee objects to provisions providing for a waiver of rights to trial by jury, the agreements binding effect on successor entities and trustees, and binding arbitration......
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We smell a number of rats, too. We also believe the Equity Committee may have been compromised and does not fully represent its minority shareholders. The testimony of the Ernst & Young "expert" appeared ruinous/disasterous to minority shareholders and the defense by Katten, Muchen & Zavis was inept, to say the least.
Time is needed to select an Equity Committee composed of a broader range of Zenith shareowners and to select unbiased and competent professional counsel.
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