Diamond‘s chapter 11 case was officially changed to chapter 7 in December with Morgan W. Fisher named as the interim chapter 7 trustee. Today, Fisher has filed a motion to employ Zvi Guttman as the general counsel to the trustee in the case. Fisher became the duly appointed interim chapter 7 trustee on January 1. The “employment of general counsel is necessary for the efficient administration of this case and to obtain maximum net recovery of assets for distribution to creditors.”

Services expected to be performed by Guttman include:

• Investigating the Debtor’s financial dealings, transactions, and other activities that may result in the prosecution of various causes of action for the benefit of the estate and its creditors;
• Investigating and pursuing causes of action at the Trustee’s direction, including actions for turnover or avoidance actions under Chapter 5 of the Bankruptcy Code;
• Assisting the Trustee with examining proofs of claim and objecting to the allowance of any claim where a purpose would be served in doing so;
• Preparing complaints, answers, discovery, motions, responses, orders, reports, and other legal papers, in the prosecution or furtherance of actions commenced by or against the Trustee except to the extent that the Trustee retains other counsel in specialized matters (e.g., avoidance actions, pending consignment litigation, and pending litigation with Alliance Entertainment), provided, however, Counsel may assist, coordinate with, or supplement the work of special counsel on such specialized matters as may be required, or as directed by the Trustee. Through this allocation of responsibilities, the Trustee seeks to maximize efficiency without redundant effort or overlap of professional services; and
• Preparing other applications, motions, reports and other legal papers and perform other legal services at the direction of the Trustee which may be necessary in the expeditious administration of the estate.
• Serving as general counsel provide day-to-day legal guidance and oversight of the numerous matters anticipated to arise in this case, while coordinating with litigation counsel who will likely be engaged to handle the bulk of any complex contested proceedings. This division of responsibilities is designed to maximize efficiency and cost-effectiveness in the administration of this estate.

Guttman, a bankruptcy attorney located in Baltimore, would be paid $620 an hour plus further expenses.

Early in the case, Guttman served as the local counsel to NECA whose affiliates include WizKids, Sparkle Pop, and Kidrobot. Sparkle Pop is one of the companies that purchased Diamond’s assets.

In the filing Guttman states he never spoke to the client and filed motions for the client’s New York counsel, made calls to put the New York counsel in touch with the committee and Debtor’s counsel, and helped the New York counsel attend a telephone hearing. NECA has waived any perceived conflict.

You can see the full filings below.