LESLIE FAY REPORTS STAY SEALED FOR NOW
Byline: JEFF SIEGEL
NEW YORK — A bankruptcy judge here Thursday said she would keep sealed the examiner’s reports on the accounting scandal at The Leslie Fay Cos., but she would reconsider in 30 days making them public.
Bankruptcy Judge Tina L. Brozman, after conferring with company and creditor representatives in her chambers, ruled on the issue without comment.
Brozman, as expected, also on Thursday approved the new labor contract between Leslie Fay and the ILGWU, which will send workers back to their jobs on Monday ending a strike that began June 1.
The reports by court-appointed examiner Charles A. Stillman reviewed Leslie Fay’s investigation into the accounting scandal — first disclosed in February 1993 — that sent the company reeling into Chapter 11. Stillman also reported on whether Leslie Fay’s legal counsel, Weil, Gotshal & Manges, failed to disclose potential conflicts of interest.
After Brozman ruled that the reports would remain under court seal, Alan P. Miller, counsel to Leslie Fay, refused to comment on statements he made to the judge in the private conference.
“The judge directed it because the parties felt it appropriate,” Miller said.
Miller had earlier explained that the examiner’s reports were initially sealed to keep them under wraps until all involved parties had a chance to go over the findings. He stated that Brozman would make her determination based on “what’s in the best interests” of creditors and Leslie Fay.
Stillman, a New York attorney, said he took no position on unsealing the report.
Leslie Fay had asked the court to appoint an examiner to review the conclusions of Arthur Andersen & Co., which was hired by the company’s audit committee to conduct an investigation. According to the company, the Andersen report, which also has never been made public, cleared current senior members of management of any wrongdoing in the accounting fraud. However, John J. Pomerantz, chairman and chief executive officer, was relieved of financial responsibilities. The company asked for the second review to remove any lingering doubts about the first probe.
The new labor pact approved by Brozman had already been ratified by the ILGWU rank and file on Wednesday.
— Fairchild News Service