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Premier Exhibitions’ official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to (a) an emergency motion of the official committee of equity security holders for derivative standing to prosecute litigation on behalf of the Debtors’ estates and (b) an emergency application to employ Robert Charbonneau and Agentis PLLC as special counsel to the equity committee.
The committee asserts, “The marketing process for the sale of the Debtors’ assets pursuant to the plan support agreement has been underway for over a year. To date that process has failed to yield a complete sale transaction that would pay creditors in full, even though this Court has long since entered judgment in the Debtors’ favor in the adversary proceeding against the Republic of France. The Equity Committee now seeks authority to prosecute a long-shot litigation that it wants creditors to fund, after wasting well over $1 million in estate funds taking discovery and investigating potential claims. Until such time as creditors are paid in full, or sufficient funds are secured by the Debtors’ estates to pay creditors in full, the Equity Committee cannot be allowed to waste estate resources on speculative litigation that has little chance of yielding significant recoveries…The Equity Committee advised the Creditors’ Committee that it was in the process of securing contingency counsel, and was still exploring securing litigation financing to fund associated costs…That is unacceptable. The cost of a single damages expert could easily run well into the seven figures in complex litigation, putting aside additional costs associated with litigation such as transcription and travel costs. If derivative standing is granted and the Employment Application is approved, creditors will be required to pay for those expenses even if they significantly erode creditor recoveries and the litigation proves a bust.”
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