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Conflict of Interest In Delphi Sale

Silver Point Capital fired trader Harry Wilson last year. Now it finds him on the opposite of the table, as a U.S. goverment representative in a contentious case involving the sale of bankrupt Delphi. the auto parts company.

Wilson is a tough bargainer on behalf of the government. That's as it should be. But his former employer, Silver Point, is on the other side, to the tune of $600 million in Delphi debt that is being worked out. Compromise and good will will be necessary to achieve a solution.  The question is, can Wilson negotiate fairly with Silver Point, given the acrimony that necessarily surrounded his departure? "Tough but fair" is the operative standard here.

This is not to say that Harry Wilson ought to quite working for the government. That's his right, after being fired last year. But he, like others in similar situations, ought to be pulled off tasks involving his former employer(s).

Judges in cases of this sort where there are conflicts of interest typically "recuse" themselves (withdraw from the case). Other government officials ought to do much the same.

Fortunately, the judge to decide on the fairness of the various offers is Robert Drain.

Disclosure: Long the acquaintance of Bob Drain