WHITE PLAINS, N.Y., FEB. 9 -- A federal judge today refused to block the mailing of a disclosure statement to Texaco Inc. shareholders, ruling that the document contains enough material to inform them of views opposing a planned reorganization of the company.
The disclosure statement forms the basis of the company's plan for emergence from Chapter 11 bankruptcy proceedings.
Chief Judge Charles Brieant found the statement adequate and not an abuse of the discretion of U.S. Bankruptcy Judge Howard Schwartzberg, as had been charged by attorneys representing a group of Texaco shareholders who are unhappy with part of the plan.
Schwartzberg approved the plan last month, clearing the way for the mailing, which is now in progress.
The plan, which includes a $3 billion settlement of Texaco's multibillion-dollar legal dispute with Pennzoil Co., must be approved by at least two-thirds of the shares voting by March 21.
If the plan is approved by both the shareholders and Schwartzberg, Texaco could emerge from Chapter 11 protection in April.
Earlier today, Schwartzberg agreed that lawyers involved in the Texaco case should be paid interim compensation at 75 percent of their fees.
Despite some reservations about firms not directly involved in the Chapter 11 proceedings here, Schwartzberg granted the payment of $5.1 million in fees and $1.2 million in expenses to 11 law firms and four individuals.
"This is by no means a minimum payment," Schwartzberg said.
If the value of the attorney services turned out to be less than originally estimated, the firms would be obligated to refund some of the payment, Schwartzberg said.
Weil, Gotshal & Manges, Texaco's lead counsel in the Chapter 11 proceedings, submitted the highest bill to the court -- $2.1 million for 13,049 hours of work by partners, associates, law clerks and paralegals.