Can we get a side view image. and maybe back a little. Is the right leg crossed over the left? If so it looks like the knee of the right leg is higher then the thigh-hip joint. IE it's down hill from the knee to the thigh-hip joint. Unlike when a lady sits down in a long dress and smooths it out under her, the cloth could be being pulled back towards the tight hip area which is causing the bunching because it is lower then the knee

Not at home where I have my setting notes...but a couple of things I would try if you can't get the cloth settings right.. If possible rotate the character and chair in X forward. Then when the sim is finished rotate back. Goal is to make the cloth run downhill and pull the bunching out. Or if the leg is crossed. Run a number of frames with the legs uncrossed to get the flow like you want and down to the shoes-floor and then near the end of the number of frames you have created cross the legs. Shortens the downhill back flow into the characters lap. Use the grouping tool and assign a new group above the knee an make the cloth stiffer (again not near poser) and leave the cloth below the knees as is or raise it's density to have more of a gravity effect and pull the cloth down which would lessen the bunching.

Gary

"Those who lose themselves in a passion lose less than those who lose their passion"