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Hughes Tool Appeals Its Removal From Committee

May 21, 1986

Hughes Tool Co. has filed an appeal of a federal bankruptcy judge's decision to remove it from a creditors' committee overseeing the bankruptcy reorganization of Smith International Inc. U.S. Bankruptcy Judge James R. Dooley said Hughes' participation on the committee would create a potential conflict of interest because Houston-based Hughes and Newport Beach-based Smith are direct competitors in the oil-field equipment market. Hughes attorney David Toy said that in its appeal to the U.S. District Court, Hughes will argue that it belongs on the committee representing Smith's largest unsecured creditors because Hughes, with a claim of $205 million against Smith, is Smith's largest creditor and holds about half of Smith's unsecured debt. In February, Hughes won a $205-million judgment from Smith in a patent infringement lawsuit.

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