Firm Probed on Asbestos Claim Billing

Washington, DC, October 10, 2007--The Justice Department plans to seek a wider investigation into the billing practices of L. Tersigni Consulting PC, a firm that advised asbestos-injury claimants in several big bankruptcy cases.

The U.S. Trustee's Office, an arm of the department, has already asked the courts overseeing the Chapter 11 cases of Congoleum Corp., Federal-Mogul Global Inc., W.R. Grace & Co. and G-I Holdings Inc. to appoint examiners to investigate allegations that the consulting firm overbilled its clients in those proceedings.

In new court papers, the trustee's office said L. Tersigni Consulting could also have overbilled clients in other cases. The office said it would seek similar investigations "in all asbestos cases in Pennsylvania, New Jersey and Delaware, in which LTC was employed as a financial adviser."

The consulting firm's clients were the official committees representing asbestos claimants in major bankruptcy cases.

Since April 2006, the U.S. Trustee's Office and federal prosecutors have looked into allegations that the firm's sole owner and principal, Loreto Tersigni, submitted bills for services that weren't performed. Tersigni died in May.

"The appointment of an independent fiduciary to investigate these serious allegations of fraud and dishonesty related to the affairs of the debtors is both warranted and necessary," the trustee's office said in court papers. An examiner, it added, could help companies that paid the bills discover whether they have "causes of action" against L. Tersigni Consulting.

The trustee's office is still waiting to hear whether the courts overseeing the bankruptcy cases of Congoleum, Federal-Mogul, W.R. Grace and G-I Holdings will appoint examiners.