Sirva creditor seeks appointment of separate unsecured creditors committee

By Caroline Salls

Pittsburgh, March 5 - Sirva Inc. creditor Triple Net Investments IX, LP has asked the U.S. Bankruptcy Court for the Southern District of New York to order the U.S. Trustee to appoint a separate committee to represent holders of class 5 other general unsecured claims in the company's pre-packaged Chapter 11 bankruptcy case, according to a Wednesday court filing.

According to the motion, having one law firm represent holders of unsecured ongoing claims and other general unsecured claims on the same official committee of unsecured creditors presents a conflict of interest because the class 4 ongoing unsecured creditors have already been paid or will be paid in full under Sirva's plan of reorganization, while the other general unsecured creditors are slated to receive nothing.

"Class 4 claimants have no business being on the committee," Triple Net said in the motion.

Triple Net said the creditors committee's counsel has argued that every Chapter 11 committee is made up of creditors with differing economic interests.

However, Triple Net said "that argument only works when those disparate creditors know throughout every stage of a case that, while their interests may differ, they ultimately will receive the same treatment at the end of the day."

In Sirva's case, Triple Net said the class 4 creditors' counsel cannot represent the class 5 creditors without jeopardizing the ongoing unsecured creditors' guaranteed recovery.

Sirva, a Westmont, Ill.-based relocation services provider, filed for bankruptcy on Feb. 5. Its Chapter 11 case number is 08-10375.

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