Bankruptcy courts are appointing independent examiners to investigate who is to blame for corporate blowups in more cases -- and not just in the big, messy ones like Lehman Brothers Holdings Inc and Tribune Co.

But bankruptcy lawyers question how useful these reports can be. They say these reports can cost tens of millions of dollars, money that otherwise could go to investors.

These reports are also stretching out the bankruptcy process, James Sprayregen, a restructuring partner at law firm Kirkland & Ellis, said at the Reuters Restructuring Summit in New York this week.

"Examiners are independent, but also basically structurally incapable of building consensus and structuring deals and agreements," he said. "It's somewhat of a conflict between what examiners do and what other constituents do."

An examiner is an independent lawyer appointed by a judge to create a written report detailing the circumstances of the bankruptcy. The examiners interview the players and often hire financial advisers and their own lawyers to conduct the probe.

The reports take months to prepare and can derail negotiations once they are publicly released. In the Tribune bankruptcy, the report put a stop to already strained negotiations.

Expected soon is an examiner's report on the collapse of Washington Mutual Inc (WAMUQ.PK), which is being prepared by Joshua Hochberg, a former Department of Justice official.

"Often, they can actually hurt the effort of the creditors committee to recover from third parties such as accounting firms or law firms if the examiner comes out and says, 'Well, I don't think it was clear that this accounting firm did anything wrong,'" said Luc Despins, a bankruptcy lawyer at Paul Hastings who often works for creditor committees.

These reports probably are not fueling new lawsuits, however, lawyers said. The potential for litigation is always there in bankruptcy.

"If people are in there and they see the potential advantage for litigation, they don't need an independent examiner to tell them how to do it," said Jay Goffman, co-head of the Global Restructuring Group at Skadden Arps Slate Meagher & Flom LLP.

Examiner reports are useful when they put the spotlight on alleged fraud, said Goffman, who specializes in representing companies in bankruptcy.

Energy company Enron, whose examiner report cost more than $100 million, is one case in which lawyers said the report was needed.

"If there has been a fraud, then sure, you should have an examiner report and they should come in and it should all be put on the table," Goffman said.

Reports often end up being little more than a negotiating tactic by investors who have little to lose and want leverage in a bankruptcy case, lawyers said.

Many courts interpret bankruptcy rules as requiring them to approve a request for an examiner made in any case with more than $5 million in debt.

"You have people abusing -- what I call abusing -- the system, not in a criminal way, but for tactical purposes," Despins said. He said people will often file a motion for an examiner "who really don't necessarily want an examiner or need an examiner or probably will never look at the report."

In some cases, courts have denied the requests. Judges recently denied requests for examiners in the bankruptcies of Visteon Corp and Innkeepers.