Hughes Tool Files Appeal Over Creditors’ Committee

Hughes Tool Co., as expected, is appealing its May 5 removal from Smith International Inc.’s creditors’ committee, according to documents filed Tuesday in Los Angeles federal court.

U.S. Bankruptcy Judge James R. Dooley had removed Hughes from the committee, even though the Houston-based company is Smith’s largest unsecured creditor. Attorneys for Smith had argued that, as its major competitor in the oil-field services industry, Hughes should not be privy to Smith’s trade secrets during the Chapter 11 reorganization proceedings.

Smith owes Hughes $205 million in a judgment handed down late last year in a 14-year-old patent infringement suit. Smith filed for protection under the U.S. bankruptcy code shortly after it lost the patent case.