Dura asks court to bar 9% noteholders counsel pending representation disclosure

By Caroline Salls

Pittsburgh, Nov. 5 - Dura Automotive Systems, Inc. asked the U.S. Bankruptcy Court for the District of Delaware to bar Ballard Spahr Andrews & Ingersoll, LLP, counsel for Dura's 9% subordinated noteholders, from participating in appeals, adversary proceedings or the plan confirmation process until it discloses information required under Bankruptcy Rule 2019, according to a Friday court filing.

Without the required disclosure, Dura said the court, the company and other interested parties have no way of knowing whether Ballard Spahr "purports to represent merely a single disgruntled creditor who seemingly acquired its 9% subordinated notes for speculative purposes in the weeks and months following the petition date or a group of disgruntled creditors engaged in such speculation and who are acting in concert."

Dura said Ballard Spahr's various pleadings "tell conflicted stories."

Specifically, Dura said the counsel filed one objection on behalf of holders of $105 million in claims, as well as a verified statement claiming that it represents 14 noteholders.

According to the motion, Bankruptcy Rule 2019 requires any entity or committee that represents more than one creditor to file a verified statement detailing exactly who it represents.

A hearing is scheduled for Thursday.

Dura, a Rochester Hills, Mich.-based automotive parts maker, filed for bankruptcy on Oct. 30, 2006. Its Chapter 11 case number is 06-11202.

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