Skadden Sues Thelen to Cover Any Damages in Bankruptcy Litigation
A dispute over which party is to blame for losses by holders of debt securities in a failed funeral company has prompted Skadden, Arps, Slate, Meagher & Flom to sue the dissolving law firm Thelen.
Skadden filed the lawsuit one day after Thelen announced it was likely to dissolve, the American Lawyer reports. The suit (PDF posted by the American Lawyer) contends Thelen should be forced to cover any damages if Skadden is found liable.
The original suit that prompted the dispute was filed by holders of the securities that settled with the funeral company Loewen Group International during its 1999 bankruptcy for less than the full amount of the notes. The article outlines the allegations.
Filed after the settlement, the suit named State Street Bank, which handled the funeral company’s issuance of the debt securities. It claimed State Street had failed to give copies of the registration statements to the company’s collateral trustee. The plaintiffs claimed the statements were needed to perfect their security interest in Loewen collateral. Litigation followed over which party was responsible for that failure.
Among the firms named in the litigation were Thelen, legal counsel for Loewen, and Skadden, which represented Loewen underwriter UBS, the story says.
Michael Feldberg of Allen & Overy is representing Thelen. The law firm “can’t imagine how it would have any liability to counsel for one of the underwriters when it was counsel to the issuer,” he told American Lawyer. “In other words they’re on opposite sides of the transaction. Thelen is representing the borrower, and Skadden is representing the lender.”
