Michael T. Kennedy v. Skadden Arps Slate Meagher & Flom LLP, et al.

Whether an otherwise time-barred challenge on fairness grounds to the sale of a debtor’s assets is subject to the doctrine of equitable tolling, where the undisputed facts of record show that a law firm appointed as debtor counsel withheld until after expiration of all applicable statutes of limitation that the senior secured lender with whom it solicited and negotiated the sale of substantially all of the debtor’s assets was owned by debtor counsel’s partners, thus effectively admitting it was on both sides of the transaction?

Whether a law firm may avoid the “disinterestedness” requirement of 11 U.S.C. § 327(a) by not disclosing under after expiration of all applicable statutes of limitation and confirmation of the debtor’s plan of liquidation, that its partners at the time owned the debtor’s senior secured lender that acquired substantially all of the debtor’s assets in a transaction negotiated on debtor’s behalf by that law firm and which was challenged at that time on grounds of insufficient consideration?

Whether this Court should exercise its supervisory power to remedy a departure from the accepted and usual course of judicial proceedings by remanding this case to the Third Circuit with instructions to apply the doctrine of equitable tolling to determine whether otherwise time-barred challenges to claims arising out of the fairness in Bankruptcy Court of a sale of substantially all of a debtor’s assets, later ratified by a confirmation order upholding debtor’s plan of liquidation, should be allowed to proceed?