Creditors Group Picked in Smith Reorganization

A committee to represent creditors in the bankruptcy reorganization of Smith International was formally appointed Monday by the office of the U.S. trustee in Los Angeles.

Represented on the 19-member committee are some of the Irvine-based oil service company’s largest creditors, including Hughes Tool Co. of Houston, a business competitor that won a $204.6-million award in a lawsuit against Smith for patent infringement.

Earlier there had been speculation that Smith might object to Hughes serving on a creditors’ committee for fear that Hughes might become privy to Smith’s trade secrets. However, Smith so far has not formally challenged the appointment of a Hughes representative by the U.S. trustee, and an attorney for the company said Tuesday that no decision would be made until Smith receives formal notification of the committee’s makeup.

In all, members of the Smith creditors committee represent $460 million of approximately $483.9 million of Smith liabilities. Among them are representatives of nine banking institutions--Chase Manhattan Bank (an official of which will chair the creditors committee), Amsterdam-Rotterdam Bank, Security Pacific Bank, Morgan Guarantee Trust Co., Deutsche Bank, Midland Bank, Bank Nationale de Paris, Bank of America and First Fidelity Bank of Newark, N.J.--the trustee for holders of Smith’s debentures. In all, the banks and their clients have total claims of about $250 million against Smith.

In addition, nine of Smith’s trade creditors, who claim Smith owes them $4 million, are on the newly appointed committee. They are British Steel Corp. Inc., Houston; K & B Machine, Huma, La.; Philipp Brothers Inc., Los Angeles; Earl M. Jorgensen Co., Lynwood, Calif.; Timken Co., Camden, Ohio; Robbins & Meyers, Fairfield, Calif.; Celanese Plastics & Specialties Co., Louisville, Ky.; Gulf Forge Co., Houston, and Kennametal Inc., Latrobe, Penn.