Allied's Payments To Firm Preclude Representation, US Says

Law360, Wilmington (July 30, 2012, 9:31 PM EDT) -- The U.S. Trustee on Monday balked at Allied Systems Holdings Inc.’s bid to retain a Canadian law firm, alleging the bankrupt car-hauling company made preferential payments to the firm that create a conflict of interest.

According to an objection filed in Delaware bankruptcy court, a Canadian Allied subsidiary paid more than $180,000 to Gowling Lafleur Henderson LLP in the 90 days before the company’s Chapter 11 filing, nearly half of which is avoidable as a preference payment.

“It is settled law in the Third Circuit that...
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