- Published on Thursday, May 17, 2012 00:22
- Written by By Alexie Villegas Zotomayor - Reporter
- Hits: 1133
THE newly constituted Creditors Committee now joins the swelling tide in favor of the dismissal of the Retirement Fund’s Chapter 11 bankruptcy petition.At the Commonwealth Retirement Association meeting yesterday, director Sapuro Rayphand, a member of the creditors committee, reported to the CRA board that the committee unanimously adopted a position in favor of the case’s dismissal.
The Creditors Committee met yesterday afternoon before the CRA meeting.
For Rayphand, the position adopted by the committee is aligned with the CRA’s favoring the motion to dismiss the case, as well as the CNMI Senate’s and the Administration’s support for the dismissal.
On May 4, the U.S. Trustee in Hawaii chose Rayphand, Mariano Taitano, Roman B. Tudela, Christopher Leon Guerrero, Barbara Torres, Juan Cepeda and Paul Joyce to comprise the Creditors Committee.
Unique to the Chapter 11 bankruptcy filing is the role of the committee of creditors with the largest unsecured claims as per 11 U.S.C. § 1102, who will represent the interests of the creditors in the formation of the reorganization plan and its approval by the court.
Rayphand said, “We voted in favor of the dismissal of the case.”
He said the committee members met last Tuesday.
Having agreed on the position, the committee, Rayphand said, had to choose from five bankruptcy law firms who would represent the committee during the court proceeding.
Two of the firms were from the mainland — New York and Texas — while three firms are based in Hawaii.
Rayphand said that owing to the fees sought by both the Texas and N.Y.-based firms, the committee whittled down the choices to three Hawaii firms.
“From the three law firms, we were going to choose to hire the counsel to represent our interest to have Chapter 11 dismissed,” he said.
Rayphand also said that one of the firms had already indicated favoring the bankruptcy filing, which for him “does not represent our desire.”
Variety learned that the majority of the members of the Creditors Committee decided yesterday 4-1 in favor of hiring Don Jeffery Gelber.
Gelber, Variety learned, made the list of Hawaii’s Super Lawyers for 2011.
“Today I was very surprised when Mr. Paul Joyce and Mr. Mariano Taitano came back and said they on their own initiated a discussion with the law firm of Don Gelber, and he now has changed his position.”
During yesterday’s gathering of the members of the Creditors Committee, Rayphand said he chose to abstain because “they did this on their own without the knowledge of the members. That was a surprise to me and I was very upset.”
For Raphand, “They were outside of the permissible procedure.”
Gelber’s fee was $360 an hour.
Rayphand said he wanted the committee to see what the two other firms have to offer before making the decision to go with firm Gelber & Ingersoll.
The longtime educator also said that all the firms they interviewed are competent to take on the case; however, it would be favorable for them to get the firm with the cheaper rate.
He said he wanted to give the other firms in Hawaii a chance to participate.
He said initially, they voted unanimously to having all firms come up with their rates, and that the firm that offered the least would be picked.
The majority of the committee members choosing Gelber, Rayphand said he abstained from voting.
Taitano, Joyce, Torres and Deleon Guerrero voted in favor of hiring Gelber.
Tudela and Cepeda were absent.
Rayphand told Variety, “When they voted for him, I felt it was against my principle. This was pretty sneaky.” He said he thought the process was tainted or flawed.
Variety tried but failed to reach Taitano yesterday.
With the Creditors Committee, U.S. Trustee, CNMI Senate and the Administration all favoring dismissal, the Retirement Fund remains alone in this court battle — for Chapter 11 to continue.
Under Chapter 11, the following are involved in the process: debtor or the Fund, bankruptcy judge, debtor’s counsel, committee of unsecured creditors or retirees, and Office of the United States Trustee.
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