A recent Law 360 story by Jeff Montgomery, “Del. Judge Calls For Fee Examiner in Kidde-Fenwal Ch. 11”, reports that a Delaware bankruptcy judge took the rare step of ordering a fee examiner up front for a larger-than-usual proposed unsecured creditor committee assembling around the Chapter 11 of fire protection and suppression venture Kidde-Fenwal Inc. and affiliates.  Ruling from the bench, U.S. Bankruptcy Judge Lori Selber Silverstein said the court would require an examiner to avoid duplication of work in the case, involving one of the companies at the center of massive multidistrict litigation targeting the sale and use of toxic firefighting foams.

"There are billions of dollars in claims here, and albeit this case may have been presented as, 'Let's get to a sale ... Let's sell the company, distribute the assets' — it's a complicated case that's going to involve many issues," said David J. Molton of Brown Rudnick LLP, counsel to the committee.  Proposed on Thursday was the retention of Brown Rudnick and Stutzman Bromberg Esserman & Plifka PC as co-counsel for the committee, along with Hogan McDaniel as Delaware counsel, Gilbert LLP as special insurance counsel, KTBS Law LLP as special counsel, Houlihan Lokey Capital Inc. as investment adviser and Province Inc. as financial adviser.

"The complexity and size of prepetition litigation is demonstrated by non-comprehensive 10-figure and 11-figure settlements within the [aqueous film forming foam] multidistrict litigation," Molton said.  Judge Silverstein said Kidde-Fenwal would likely have ended up with a fee examiner appointment anyway.  On Thursday, however, the judge said she will select the examiner "from the get go."

"I understand it's a tricky issue," Judge Silverstein said.  "The committee is entitled to choose their counsel and pick their team.  I don't think, though, that they're entitled to hire everybody they want to hire because either they can't agree or they simply think it would be nice to have more rather than less."  The appointee "will be charged not only with general fee examiner issues but monitoring the sharing of tasks that the committee assigned to its various counsel.  Not interfering, but letting me know."

Judge Silverstein's fee examiner order followed an objection from the Office of the U.S. Trustee, which argued in part that the "committee has not met its burden to demonstrate that the services of three law firms which substantially overlap are reasonable and in the best interest of the debtor's estate."