Bankrupt Company News reports yet another development in the Energy XXI bankruptcy proceedings, drawing further attention, on this occasion, to the withdrawal of the Equity Committee’s Bermuda lawyers (apparently on the basis of non-payment).
As the report explains, the Equity Committee has filed an emergency motion with the US bankruptcy court, asserting that “The Equity Committee has been advised that Bermuda Counsel cannot work on a contingency under the Bermuda rules. Bermuda Counsel has been granted leave to withdraw from the Bermuda Proceeding….Absent any reconsideration of the cap on the Bermuda Counsel’s fees by the Bankruptcy Court, the Equity Committee seeks leave to terminate the Bermuda Counsel on behalf of the Equity Committee. The Bermuda Counsel has advised there are grounds for appeal of the Bermuda Order and Judgment. However, the Equity Committee does not have the resources, at this time, to fund an appeal absent an increase to the cap on the fees.”
Energy XXI’s management have filed an opposition brief in response to the motion, in which they point out, that, from their perspective, “The Official Committee of Equity Security Holders (the ‘Equity Committee’) continues to raise issues not of concern to any creditors to try to distract from the fact that equity is out of the money by more than $2 billion dollars. Here, they file a motion to disqualify Conyers Dill & Pearman, the Debtors’ special Bermuda counsel, who has already done an exceptional job defeating the Equity Committee’s attempts to derail the Debtors’ ancillary proceedings in Bermuda. The present Motion does not advance the Equity Committee’s cause and has no bearing whatsoever on any recovery the Equity Committee seeks. Nonetheless, the Motion raises serious professional responsibility concerns, and as a result, Conyers has hired separate counsel to represent its interests and to specifically respond to the serious allegations raised by the Equity Committee.”
The Court docket suggests that Equity Committee’s motion to disqualify Conyers Dill & Pearman has now been withdrawn on a ‘without prejudice’ basis.