A federal appeals panel has ruled that K&L Gates can challenge part of a settlement between former Teligent Inc. CEO Alex Mandl and the bankrupt telecommunications company’s unsecured creditors in order to defend itself against a malpractice suit filed by Mr. Mandl.

Judge Rosemary S. Pooler, writing for a three-judge panel of the U.S. Court of Appeals for the Second Circuit, said that the law firm could challenge a provision in the settlement requiring Mr. Mandl to turn half of any judgment he won in his malpractice case over to Savage & Associates, a law firm acting as representative of Teligent’s unsecured creditors. However, the judge said K&L Gates could not have access to all the records of the mediation that led to the settlement.