Synergy Pharmaceuticals Inc fka SGYPQ

[Blue Sun]

Really?? i read the docket.. and F-you
C. The Farnan Disclosures are Insufficient
The Farnan Motion states in a conclusory fashion that Mr. Farnan is disinterested and has
no relationship to the Debtors or its directors. He is being retained as “an independent
fiduciary.” However, the Debtors offer no evidentiary support for the conclusion that Mr.
Farnan is independent and disinterested. As his independence is central to his retention, the
Debtors should provide a declaration similar to an affidavit of disinterestedness, containing a
conflicts check of the parties-in-interest in this case.
D. The Kirkland Disclosures are Insufficient
Section 327 provides that the trustee or debtor in possession may employ, with court
approval, professionals who are disinterested and who do not hold or represent interests adverse
4 See Hr’g Tr. at 39-40, In re Angelica Corp., Case No. 17-10879 (JLG) (Bankr. S.D.N.Y. Aug. 22, 2017),
ECF Doc. No. 738.
18-14010-jlg Doc 481 Filed 03/01/19 Entered 03/01/19 14:17:23 Main Document
Pg 13 of 15
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to the estate. 11 U.S.C. § 327. Bankruptcy Rule 2014 imposes a complementary duty of
disclosure so that courts and parties can determine whether a professional to be employed
satisfies section 327’s ethical requirements. Rule 2014 requires that disclosures be sufficiently
explicit for a court and other parties to determine whether a professional is disinterested or holds
or represents an adverse interest. In re Lewis Road, LLC, 2011 WL 6140747, *8 (Bankr. E.D.
Va. 2011).
Several matters need clarification with respect to the Kirkland Application. First, Mr.
Farnan is by definition “an independent fiduciary” appointed to “evaluate the Debtors’ potential
claims against their current Directors and officers.” See Farnan Motion at ¶ 10. Kirkland is
being retained as counsel for the Debtors. As such, Kirkland needs to explain its role in the
event Mr. Farnan concludes that current Directors and officers engaged in inappropriate conduct.
Specifically, Kirkland must explain its duties if Mr. Farnan reaches negative conclusions about
the directors and officers, but the directors and officers disagree and request confidentiality.
Second, the Marcus Declaration and the Engagement Letter state that Kirkland also
represents the following parties and will continue to do so in unrelated matters: Bausch, FTI
Consulting, Alvarez & Marsal North America, LLC, Jeffries LLC, and Houlihan Lokey. Given
these entities’ connection to these cases, Kirkland should disclose the nature of its current
representation of these entities and the percentage of the overall business of the entities. In
particular, the Bausch representation must be thoroughly explained.
Third, the Marcus Declaration discloses that Kirkland currently represents certain
affiliates of directors of the Debtors. Kirkland Application at ¶¶ 24-25. From Schedule 2, the
affiliates and directors are not clear. Mr. Farnan may be investigating Directors and officers
whose affiliates are current Kirkland clients. These connections must be explained.
CONCLUSION
WHEREFORE, the United States Trustee respectfully requests that the Court (i) deny
the Farnan Motion and the Kirkland Application and (ii) grant such other relief as the Court
deems appropriate and just.
Dated: New York, New York
March 1, 2019
Respectfully submitted,
WILLIAM K. HARRINGTON
UNITED STATES TRUSTEE, Region 2
By: /s/ Greg M. Zipes
Greg M. Zipes
Benjamin J. Higgins
Trial Attorney
201 Varick Street, Room 1006
New York, New York 10014
Tel. [phone]