Quigley calls examiner motion 'legally and factually without merit'

By Caroline Salls

Pittsburgh, Oct. 17 - Quigley Co. Inc. objected to the U.S. Trustee's motion for appointment of an examiner to investigate the company's relationship with parent Pfizer Inc., according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the objection, the motion "is legally and factually without merit" because it is based on a Bankruptcy Code provision that requires the court to order appointment of an examiner only if a company's fixed, liquidated, unsecured debt exceeds $5 million.

Quigley said the U.S. Trustee claims that creditors in class 3 and class 4 of the company's fourth amended plan of reorganization satisfy the statutory $5 million threshold for the mandatory appointment of an examiner, but class 3 is actually "overwhelmingly made up of debts owed to Pfizer Inc., Quigley's sole shareholder and an insider, and thus excluded."

To get around this obstacle, Quigley said the U.S. Trustee relied on three specific personal injury judgments that total more than $5 million.

"The UST conveniently ignores, however, the consensual reduction of these three claims by court-approved settlements," Quigley said in the objection.

Quigley said the U.S. Trustee also relied on a Bankruptcy Code provision that allows appointment of an examiner if the appointment is in the interests of creditors or equity security holders or other estate interests by claiming that a bad faith relationship exists between Quigley and Pfizer.

The company said the bad faith argument "is strikingly similar" to an argument previously made by the company's informal committee of tort victims in its motion for appointment of a trustee.

Quigley said the court ruled in June that allegations of bad faith in this case are plan issues that are more appropriately dealt with at confirmation.

"[The U.S. Trustee's] motivation for now bringing these issues before the court at this time is questionable, and, at a minimum, is another inexplicable diversion from the goal of getting creditors paid," Quigley said in the objection.

"Moreover, the facts on which the UST bases her bad faith arguments are simply wrong."

Quigley, a unit of Pfizer Inc., filed for bankruptcy on Sept. 3, 2004. Its Chapter 11 case number is 04-15739.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.