Bankrupt Corporate Debtor Claims

In most corporate bankruptcies, the Debtor lacks sufficient assets to satisfy the claims of all creditors in full and, if the Debtor is a public company, there are no funds to compensate shareholders, who stand at the bottom of the distribution priorities under United States Bankruptcy law.

To increase the assets available for distribution to claimants, the Debtor and/or special committees of creditors and/or shareholders may be established pursuant to a Confirmation Plan and charged with asserting claims against other parties for the benefit of the estate of the debtor. The more funds that are recovered, the more funds there are to satisfy the claims of creditors and potentially stockholders. Following this approach, claims may be asserted against the Debtor’s accountants, banks, or the officers and directors responsible for the company’s demise. There are distinct advantages to the claimants where counsel is retained to prosecute such claims on a contingent or part-contingent basis.

KL has been retained as Litigation Counsel, on a contingency basis, by the Post-Confirmation Equity Subcommittee established by order of the United States Bankruptcy Court for the Southern District of Texas in In re Superior Offshore International, Inc., Case No. 08-32590-H2-H11 (Chapter 11), dated January 28, 2009. The Subcommittee has the right to “review, prosecute and settle all claims and Causes of Action against the Debtor’s former officers and directors for action occurring prior the Petition Date.” KL is currently investigating the claims that may be prosecuted.

On March 30, 2010, KL was retained by the Liquidating Trust, created pursuant to the Chapter 11 Plan of Liquidation for the PTMS Liquidating Corp. that was approved by order of the United States Bankruptcy Court for the District of Delaware on July 15, 2009, to represent the Liquidating Trust concerning claims that may exist against General Atlantic LLC and certain of its current or former officers or partners. KL is investigating potential claims against General Atlantic LLC, which was the largest single shareholder of the Debtor, owning 26.8% of its outstanding common stock, for allegedly taking actions that were contrary to the interest of the Debtor which caused the Debtor to have to file for bankruptcy on July 23, 2008.