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The U.S. Bankruptcy Court for the District of Delaware on Friday sustained objections of the U.S. Trustee in the case of Boomerang Tube, LLC to the fee applications by counsel to the unsecured creditors’ committee because “they include a provision indemnifying them for expenses incurred in any successful defense of their fees.” The U.S. Trustees objected to the inclusion of the fee defense provisions in the retention applications, contending that the provision is precluded by the recent Supreme Court holding in ASARCO.

The judge in Sabine Oil & Gas Corporation's chapter 11 case has been asked to review what Wells Fargo, the first lien agent, is characterizing as excessive requested professionals fees totaling approximately $8.3 million incurred as part of what it describes as the "scorched earth litigation tactics" of the five professional firms involved in the lawsuit, Texas Lawyer reported today. Wells Fargo recently filed in its role as the first lien agent in Sabine Oil's case in the U.S. Bankruptcy Court for the Southern District of New York its limited objection with bankruptcy judge Shelley Chapman, related to fees incurred by committee projections in connection with the committee's investigation in the bankruptcy case. Wells Fargo stated that the committee's authority to investigate and challenge the liens and claims of the pre-petition secured parties at the expense of the debtors' estates is not unlimited. According to Wells Fargo, in accordance with standard practice in complex chapter 11 cases, the debtors and the committee agreed in a heavily negotiated final cash collateral order to a cap on the fees and expenses that can be incurred by the committee in connection with its investigation.

Junior creditors of Caesars Entertainment launched a fresh attack against a top U.S. restructuring attorney, alleging that he misled a judge and asking that the law firm be disqualified from parts of the casino group's bankruptcy case, Reuters reported yesterday. Jones Day, the junior bondholders' law firm, asked the court to reconsider a May order that allowed the bankrupt unit of Caesars Entertainment Corp to hire Kirkland, led by James Sprayregen. The dispute between two of the best-known law firms in corporate restructuring adds another layer of feuding to Caesars' $18 billion bankruptcy, which involves the biggest U.S. private equity and hedge fund firms. In a new court filing on Friday, Jones Day revealed evidence from a board meeting of the operating unit that it says shows testimony by Sprayregen at a trial over Kirkland's hiring by Caesars was incomplete and misleading. Kirkland & Ellis denied the allegation and said that it was without merit. Jones Day initially filed a redacted version of the motion last week, but Bankruptcy Judge Benjamin Goldgar in Chicago rejected that for procedural reasons.