August 232000

Third

Circuit Awards Pepper Hamilton $200K in

Fees

A federal appeals court

has overturned a Delaware bankruptcy court's

order requiring Pepper Hamilton LLP, a

Philadelphia-based law firm, to "disgorge"

nearly $140,000 in fees it has already

been paid and denying its final petition

for more than $65,000 in fees, according

to

style='mso-bidi-font-style:normal'>The Legal Intelligencer. The unanimous

three-judge panel found that the bankruptcy

court abused its discretion when it denied

the fees due to Pepper Hamilton's alleged

failure to disclose to the court an employment

restriction that could have led to its

forced withdrawal from the case. The decision

in In

re Olsen Industries Inc. focuses on

a provision in the Bankruptcy Code that

allows the court to limit compensation

to a lawyer who at any time "is not

a disinterested person, or represents

or holds an interest adverse to the interests

of the estate." The appeals court

said the bankruptcy court limited Pepper

Hamilton's fees not on a finding of actual

adverse interest, but on "the possibility"

that the lawyers would take an adverse

position. Although the firm failed to

"explicitly disclose" the terms

of its employment restriction to the bankruptcy

court, the appeals panel found that the

firm's actions "were sufficient to

satisfy the requirements of Bankruptcy

Rule 2014(a)."

National

Boston Medical Announces Chapter 11 Petition

National Boston Medical Inc. announced

yesterday that it has filed chapter 11,

according to a newswire report. The company

said it was unable to continue operating

its business due to the April sale exchange

agreement entered into between Infotopia,

Dr. Abravenals Formulas Inc. and NBM.

It was represented to the board of NBM

that Infotopia would honor and assume

certain obligations of NBM as partial

consideration for the transfer, but Infotopia

management has refused to honor its representations.

Certain other matters were misrepresented

to the NBM’s board, the company said,

and NBM had failed to receive certain

other consideration as part of the transfer.

NBM is currently seeking investors to

fund its proposed reorganization plan.

EQK

Files Modified Amended Reorganization

Plan

EQK Realty Investors

I yesterday announced that it filed a

modified amended reorganization plan with

the U.S. Bankruptcy Court for the Middle

District of Pennsylvania, according to

a newswire report. The plan contemplates

that the Harrisburg East Mall, the sole

remaining real estate asset of EQK, will

be sold at an outcry auction on Sept.

21. It also reflects terms of an agreement

dated as of Aug. 18 among EQK, American

Realty Trust and American Realty Investors

Inc. the new parent company of ART. Under

the modified plan, the net assets of EQK

(including proceeds from the anticipated

auction sale of the mall and the consideration

to be paid pursuant to the agreement)

remaining after payments of secured creditors'

claims will be paid first to EQK's unsecured

creditors until they are paid in full,

and then any remaining assets would be

distributed to EQK's shareholders.

Drkoop.com

Receives $20 Million in Financing, New

Management Team

Health Web site drkoop.com Inc. said yesterday

it received $20 million in equity financing,

a new management team and a reconfigured

board, according to Reuters. Analysts,

however, said the quick cash infusion

is just a Band-Aid for the floundering

Austin, Texas-based company. "In

theory, it's the financing that they need,

but they had a $40 million loss and their

revenue situation isn't going to change,"

said Rachel Terrace, an analyst with Jupiter

Communications Inc. "I can't imagine

anyone in their right mind would want

to invest in this company. This (financing)

is a Band-Aid for now. I would not be

surprised to see them file for bankruptcy."

The $20 million financing comes from a

group of investors that includes Prime

Ventures, JF Shea Ventures, Cramer-Rosenthal-McGlynn

Inc. and RMC Capital. The new management

team and its investor group have invested

$3.5 million as part of this financing,

the company said. The financing could

increase to as much as $27.5 million if

outstanding over-allotment options are

exercised. Drkoop.com named Richard Rosenblatt

as chief executive officer, Edward Cespedes

as president, and Stephen Plutsky as chief

financial officer. Co-founder C. Everett

Koop, the former U.S. surgeon general,

will continue to serve as chairman, and

former President and CEO Donald Hackett

will remain a director of the company.