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A director of bankrupt Decora Industries Inc. who claims the company owes him more than $456,000 alleges mismanagement by some members of the company’s board and braintrust and has asked a judge to appoint an examiner. The request, from former chief executive officer and current director Nathan Hevrony, has yet to get a response from U.S. District Judge Joseph J. Farnan Jr. in Wilmington, Del., attorneys involved in the case said May 4. Decora of Fort Edward, N.Y., manufactures self-adhesive consumer decorative products. The company filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington Dec. 5, listing assets of $105.7 million and debts of $120.1 million. Hevrony, a member of Decora’s board for more than 10 years, also alleges misuse by some members of the board and management “of their official powers and conflicts of interest,” according to court documents. Hevrony owns more than 5 percent of the company. “We don’t make this type of motion lightly,” said Hevrony’s attorney, Shalom Jacob of Swidler Berlin Shereff Friedman in New York. As part of the request, Hevrony’s attorneys have also asked Farnan to seal the application for the appointment of an examiner and related papers. Hevrony, however, has filed a claim in the bankruptcy for $456,250. He recently told the Albany (N.Y.) Times-Union that he is owed the money for, among other things, putting together the sale of Decora’s German subsidiary, Konrad Hornschuch AG. He stepped down as CEO in July 2000 to take on the project. Decora’s new CEO in published reports has said that the company doesn’t have the money to pay Hevrony, but Hevrony claims it does. “The misleading information in conveying things openly has been one of the problems,” he told the Times-Union. “It’s not about the money. I’ve loved this company too long to leave with a dispute of $456,000.” Meanwhile, court documents only state that “the Hevrony Declaration contains confidential commercial information of a sensitive nature. Public disclosure of that information may cause harm to the companies and, in turn, their creditors, and such harm could hinder a favorable outcome to this bankruptcy case.” Jacob, Hevrony’s lawyer, declined to give further details because of the request for a seal. Debtor’s counsel, Robert A. Klyman of Latham & Watkins in Los Angeles, referred calls to Decora president and chief executive Ronald A. Artzer, who was not available for comment Friday. Robert Hanlon, Decora’s chief financial officer, said Hevrony is entitled “to make whatever allegations he feels he has to.” William A. Hazeltine, with Potter Anderson & Corroon in Wilmington and counsel to the unsecured creditors committee, said his clients have not developed an opinion on the motion for an examiner. “Of course, we do have an interest in the outcome,” he said. Meanwhile, Hanlon said Decora has hired Houlihan Lokey Howard & Zukin to help the company raise equity. The bankers have created a book, and there has been a fair amount of interest, Hanlon said. Decora is open to asset sales, but a liquidation is not under discussion, he said. Decora is represented by Klyman and Michael. R. Nestor of Young Conaway Stargatt & Taylor in Wilmington. Besides Jacob, Hevrony is represented by Joseph Grey and Thomas G. Whalen Jr., both of Stevens & Lee in Wilmington. The unsecured creditors committee is represented by Hazeltine and Laurie Selber Silverstein of Potter Anderson. This article was previously published in The Deal, a publication associated with American Lawyer Media.

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