Sometimes law firms are counsel to bankrupt companies, but sometimes they’re unsecured creditors, Bloomberg Business reported today. In the bankruptcy of American Apparel Inc., the law firms Skadden, Arps, Slate, Meagher & Flom LLP White & Case LLP and Paul Hastings LLP are among the latter. The clothing company owes approximately $6 million in total to the three firms for legal services. At $3.8 million, Skadden’s claim ranks third among all unsecured creditors. White & Case, which says it is owed $1.4 million, is also in the top 10. Paul Hastings says that it is due just under $700,000 for its work for the company. Skadden represented the company in several matters, including a battle with founder Dov Charney over reimbursement of legal fees after he was fired from the company. A White & Case spokesperson declined to comment but the firm’s website states that one of its partners represented American Apparel’s directors “in connection with a dispute with the former CEO.” Paul Hastings has represented the company in matters including its defeat of Charney’s defamation suit in state court in California. American Apparel filed for court protection on Monday, putting it among the 10 largest apparel retailer bankruptcies in the past five years.
