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The appointee who fills the U.S. trustee position in New York will follow in the footsteps of an official who said her superiors in Washington blocked some efforts to improve the bankruptcy process in a region that handles more major corporate bankruptcies than any other. “The increased oversight from the executive office impeded my ability to assist the restructuring community in streamlining and improving restructuring here in New York,” said Deirdre Martini, who left the trustee post in April. She declined to say which efforts were stymied. Martini is now a senior restructuring advisor at CIT Group Inc. Trustees, who supervise the administration of bankruptcy cases through regional offices across the country, are employees of the U.S. Department of Justice. The U.S. Bankruptcy Court in New York City, a part of the Southern District of New York, has tended to attract the biggest and most complex cases in the past two years. From the start of 2005 through May this year, eight of the nine largest Chapter 11 cases in the United States were filed in New York, according to data compiled by Lynn LoPucki, a law professor at the University of California at Los Angeles. Those cases had assets worth $145 billion and are worth billions of dollars in fees for lawyers, bankers and consultants who work on the cases. Justice Department spokeswoman Jane Limprecht declined to comment on Martini’s remarks. Diana Adams is the acting trustee for Region 2, which includes New York, Vermont and Connecticut. Justice has no date for appointing a permanent trustee, Limprecht said. From October 2003 to her resignation, Martini handled many complex cases, including Refco Inc. and Delphi Corp. The system in New York wasn’t broken, it just needed to be “redefined,” Martini said. “When I felt I could no longer contribute in a fashion that I felt was productive and positive, I chose to resign and look for other opportunities,” Martini said. In some cases, Martini’s office took stands that sometimes set her apart from predecessors. For instance, her office precluded professionals already engaged on one major airline case from working for the committee of another airline. Some lawyers who worked with Martini said that she was trying to make constructive changes to the process, while others also noted that she was more active in the position than her predecessors. “She was trying to anticipate problems and come up with either solutions or procedures to obtain solutions that would make cases operate faster and smoother,” said Martin Bienenstock, who leads the restructuring practice at Weil, Gotshal & Manges in New York.

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