RNI Wind Down U.S. Trustee requests appointment of Chapter 11 trustee following insider investigation

By Caroline Salls

Pittsburgh, Aug. 29 - RNI Wind Down Corp.'s U.S. Trustee requested court approval to appoint a Chapter 11 trustee for the company's bankruptcy case linked to a completed investigation by the company's official committee of equity security holders, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

U.S. Trustee Kelly Beaudin Stapleton said bankruptcy law allows her to seek appointment of a Chapter 11 trustee when she suspects that current members of the company's governing body, including the chief financial or executive officer, participated in fraud, dishonesty or criminal conduct in managing the company.

Stapleton said she also plans to ask the court to make the equity committee's findings public so creditors and other interested parties can learn the facts uncovered during the investigation.

After the close of the sale of Riverstone Networks, the committee was given approval to investigate the pre-bankruptcy and post-bankruptcy conduct of company insiders.

In addition, Stapleton said RNI's board of directors met last week to review the equity committee's confidential findings, and during that meeting, interim president and chief executive officer Noah D. Mesel resigned.

The U.S. Trustee said Mesel is still employed by RNI, but he was replaced as interim president and CEO by Alan Miller.

RNI, formerly Riverstone Networks, Inc., a Santa Clara, Calif., provider of carrier ethernet routers, filed for bankruptcy on Feb. 7. Its Chapter 11 case number is 06-10110.

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