TROY, Mich. – Kmart Corp.'s board of directors is seeking U.S. Bankruptcy Court approval to hire an independent law firm to represent board members in the company's Chapter 11 reorganization.
In a motion filed this week, the board said it wants to employ New York-based Dewey Ballantine LLP as its special counsel. Kmart would pay the firm's fees, which range from $102 to $595 an hour.
According to its motion, the board wants outside counsel to provide legal advice to directors, assist them in reviewing Kmart's reorganization developments and represent them if they are named in lawsuits.
The motion is scheduled to come before Judge Susan Pierson Sonderby during a hearing Wednesday in Chicago.
Providing separate counsel for the board is a controversial move in most bankruptcy cases, said H. Jason Gold, a bankruptcy lawyer at Wiley Rein & Fielding LLP in Washington, D.C.
"The counsel would only be for the benefit of these individuals, not for the creditors," Gold told The Detroit News for a Thursday story.
The Troy-based retailer has nine board members, including James B. Adamson, the company's chairman and chief executive officer.
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