I.B.C. legal action raises questions
January 08, 2009
by Josh Sosland
KANSAS CITY — A petition to pay a $250,000 legal retainer related to the bankruptcy of Interstate Bakeries Corp. was approved Jan. 7 in the U.S. Bankruptcy Court, Western District of Missouri, Kansas City Division. Judge Jerry W. Venters okayed the employment and retention of Kasowitz, Benson, Torres & Friedman, New York, as special litigation and conflicts counsel "for matters arising in or related to the Chapter 11 cases." The engagement letter from Kasowitz, Benson, included in the filing, does not elaborate on what transpired leading I.B.C. to seek counsel. In early December, Judge Venters approved a reorganization plan, paving the way for I.B.C. to exit its four-year-old bankruptcy as early as Dec. 15. Since the approval, I.B.C. has not come out of bankruptcy, and the company recently issued a financial update detailing a $21 million loss for the four weeks ended Nov. 15 following a $15 million loss the month before. The most recent loss was the largest in three years.
Kasowitz, Benson said it specializes in "complex, highly sophisticated litigation." David M. Friedman, the partner at the law firm who signed the I.B.C. engagement letter, heads the firm’s bankruptcy group. His clients in recent years have included the committee for unsecured creditors of Adelphia Communications Corp.