Bankrupt Stearns: DOJ Is Wrong to Challenge Its Hire of Skadden

Mortgage lender Stearns Holdings LLC defended its choice of hiring Skadden Arps Slate Meagher & Flom LLP as its lead bankruptcy counsel, refuting the U.S. government’s objection over the law firm’s ties to Stearns’ majority owner Blackstone Group.

Skadden, which still counsels Blackstone, doesn’t hold any interests that would conflict with Stearns’ Chapter 11 estate, Stearns said in its July 29 filing seeking court approval of its employment application.

Skadden represented Blackstone when it acquired a majority stake in Stearns four years ago. Blackstone is seeking to acquire the rest of Stearns shares that it doesn’t own for about $60 ...