Monday, March 05, 2007

Bondholders Will Sue Maxxam Execs If Bankruptcy Case Stays In Texas

From: Bingham McCutchen website. Bingham McCutchen is the lawfirm representing a group of Scopac bondholders who say they own 80% of Scopac timber notes.

[Daily Bankruptcy Review, March 1, 2007 - A group of bondholders say they’ll sue Maxxam Inc.’s top executives for fraud if a bankruptcy judge rules Scotia Pacific (Scopac), a California-based lumber company owned by Maxxam, can proceed with its Chapter 11 case in Texas. According to Daily Bankruptcy Review, papers filed Monday in U.S. Bankruptcy Court in Corpus Christi, Texas, say the bondholders will “hold management personally responsible for their fraudulent misrepresentations” if Judge Richard S. Schmidt decides that Scopac’s place of business is in Texas. Scopac claims its bankruptcy case was properly filed in Corpus Christi on January 18 because its principal place of business is in the “southern district of Texas.” However, the bondholders, who are represented by Hartford partners Evan Flaschen and Greg Nye and counsel Kurt Mayr, say that claim is contradicted by documents Scopac signed off on in 1998 when it issued the bonds, which claim its principal offices was in Scotia, Calif. According to bondholders, Scopac is either misrepresenting its principal place of business to the court or it has always misrepresented its place of business to the bondholders. Flaschen said the bondholders intend to sue Scopac managers and board of directors as well as Maxxam for fraud. This story also ran on the Dow Jones Newswire.]

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