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Of more than $60 million in legal fees already paid or being sought in connection with Enron Corp.’s Chapter 11 bankruptcy, Reed Smith’s $186,000 may prove among the hardest to squeeze from the estate. That is because Reed Smith represents the Wiser Oil Co., the Dallas oil-and-gas exploration company that is perhaps the most well-known and certainly the most litigious of the so-called trading creditors. These small energy companies have been fighting to wrest control of the proceedings away from the debtor and the official unsecured creditor’s committee, as well as their respective counsel at Weil, Gotshal & Manges and Milbank, Tweed, Hadley & McCloy. In a sharply worded objection filed Monday to Wiser’s Aug. 9 application for fees, Martin J. Bienenstock of Weil Gotshal said Wiser was seeking reimbursement from the estate and other creditors “for unsuccessfully trying to advantage itself at the expense of other creditors.” Chapter 11 of the U.S. Bankruptcy Code permits a creditor to seek reimbursement for its attorney fees and expenses if they have made a “substantial contribution” to the progress of the bankruptcy. A hearing on the matter before Southern District of New York Bankruptcy Judge Arthur J. Gonzalez is scheduled for 10 a.m. today. Neither Bienenstock nor Deborah A. Reperowitz, the Newark, N.J.-based Reed Smith partner representing Wiser, returned calls seeking comment. Wiser and similar small companies, such as Dominion Resources and Exco Resources, had contracts with Enron North America, Enron’s energy-trading subsidiary, whereas the large banks and insurance companies that dominate the official committee were primarily creditors of Enron Corp., the parent company. The energy companies have consistently sought to have Enron North America treated as a separate debtor or, at the very least, to have a separate creditors’ committee formed. Few were as active as Wiser though, which has filed 16 pleadings to date. Almost immediately after Enron’s Dec. 2 filing, Wiser filed objections to the company’s retention of Weil Gotshal as debtor’s counsel on the grounds that Enron North America should have separate counsel. The company has also sought to have a Chapter 11 trustee with broad powers appointed to oversee the bankruptcy. Gonzalez has ruled against all of Wiser’s motions. Other small creditors also have attacked the running of the Enron bankruptcy. In May, Exco unsuccessfully sought to have Milbank Tweed disqualified from its role as counsel to the official creditors’ committee on the grounds that the firm was conflicted owing to corporate work it had performed for Enron in the past. Gonzalez’s hostile response to their actions has discouraged most of the trading creditors from applying for reimbursement, said John Nabors of Dallas’ Gardere Wynne Sewell, who argued for Milbank’s disqualification on Exco’s behalf. “I don’t think we would have a very receptive audience,” he said. “I wouldn’t hold my breath.” To his knowledge, Nabors said, Wiser was the only trading creditor to have applied for reimbursement from the estate, though he noted many more would apply if Wiser got a favorable ruling from the court. One of the major arguments advanced by Wiser is that it was instrumental in the one ruling that the trading creditors generally regard as a victory: Gonzalez’s Feb. 25 order excepting Enron North America from the debtor’s centralized cash management system and appointing an examiner to oversee the trading subsidiary. In the Wiser application, Reperowitz cited a leadership role for the company, writing that “it was apparent to Wiser early in these cases that it would need the support of additional creditors if it was to be heard and taken seriously in these cases.” Wiser, she continued, rented a hotel conference room at the Four Seasons Hotel in Houston and organized a January meeting to discuss centralized cash management issues. This $2,500 expense is included in Wiser’s application. In Enron’s objection, Bienenstock called Wiser’s account “self-congratulatory,” and pointed out that Gonzalez had ruled on cash management and an Enron North America examiner sua sponte. Nabors said he also thought Wiser might be claiming too much credit on the cash management ruling, as many other creditors participated in the motion and a number of different lawyers argued in Gonzalez’s courtroom. “Every lawyer who participated probably thinks they deserve the credit,” he said.

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