Mirant judge authorizes examiner to prosecute Debt Settlement Associates for trades

New York, Oct. 24 - Mirant Corp. bankruptcy judge Michael Lynn authorized court-appointed examiner William Snyder to prosecute Debt Settlement Associates LLC and its principal Richard Feferman for allegedly filing notices that claims had been traded without the knowledge of the creditors owning those claims.

Lynn's authorization follows an investigation into "certain unusual claims trading activity" by Snyder. The bankruptcy court asked Snyder to look into the trades on Sept. 7, and the examiner filed his report under seal on Oct. 5.

After reading the report and other documents, Lynn concluded "it appears that Debt Settlement Associates LLC and its principal Richard J. Feferman have filed transfer notices purporting to transfer numerous claims ... that may have occurred without the knowledge or consent of the respective creditors originally holding such claims."

While authorizing the examiner to begin litigation, Lynn also noted that the bankruptcy court is not taking any position on the examiner's claims.

Mirant, an Atlanta-based power company, filed for bankruptcy July 14, 2003 in the U.S. Bankruptcy Court for the Northern District of Texas. Its Chapter 11 case number is 03-46590.

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