Delaware Bankruptcy Litigation : Delaware Bankruptcy Lawyer & Attorney : Fox Rothschild Law Firm : Financial Restructuring & Bankruptcy Litigation

Introduction

On August 20, 2010, Petroflow Energy Ltd. ("Petroflow"), filed a petition for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  Months prior to Petroflow's filing for bankruptcy, the company's subsidiaries, North American Petroleum Corporation USA and Prize Petroleum LLC, filed petitions for bankruptcy in Delaware.  After Petroflow filed for bankruptcy in August, it filed a motion with the Bankruptcy Court seeking to have the orders entered in the "First Filed Debtors' Cases" (i.e. North American Petroleum's and Prize Petroleum's cases), made applicable to Petroflow's bankruptcy proceeding.

There is nothing extraordinary about the relief Petroflow seeks in its motion.  By filing the motion, the company seeks to save the time and expense of having to file, notice and present the same motions that if filed in the "First Filed Cases." However, in order to obtain such relief, Petroflow requests the Court exercise its equitable powers pursuant to section 105 of the Bankruptcy Code.  This post will look at how the Court can turn back the clock so that the orders entered in a previously filed case will have the full force and effect in a newly filed bankruptcy proceeding.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Earlier this month Alfred T. Giuliano, the Chapter 7 Trustee for National Wholesale Liquidators, began filing various complaints seeking the avoidance and recovery of alleged preferential transfers.  On November 19, 2008, I wrote on this blog about the commencement of the National Wholesale Liquidators ("NWL") bankruptcy (read my prior post concerning NWL here).  As indicated in the prior post, NWL filed for bankruptcy with an agreement with its lenders that it would either find a buyer while in bankruptcy, or convert and liquidate under Chapter 7 of the Bankruptcy Code.  The NWL bankruptcy converted to Chapter 7 on February 26, 2009. 

The Chapter 7 Trustee hired Archer and Greiner to represent him in this bankruptcy proceeding.  Pursuant to the summons filed with the preference actions, the Court has scheduled the first pretrial conference on December 8, 2010.  The Trustee appears to have filed approximately 90 preference actions so far, however, more may follow.  These adversary actions, as well as the NWL bankruptcy proceeding, are before the Honorable Mary F. Walrath.  Judge Walrath previously served as Chief Judge of the Delaware Bankruptcy Court. 

---------------------------------------------------------

Jason Cornell is a bankruptcy attorney in Wilmington, Delaware.  Jason practices in Fox Rothschild's Financial Services and Litigation departments.  You can reach him at 302 427 5512, or jcornell@foxrothschild.com.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Introduction

On August 4, Judge Mary F. Walrath issued an opinion in the Eclipse Aviation bankruptcy that discusses the scope of the Court's subject matter jurisdiction.  This issue - the subject matter jurisdiction of the bankruptcy courts - comes up less frequently in decisions than issues such as plan confirmation, relief from stay or avoidance actions (to name a few).  Often, the subject matter jurisdiction of a proceeding is simply not in dispute.  This reason alone is why Judge Walrath's decision is worth review:  it provides a brief but thorough look at how the Court decides whether it has jurisdiction over a particular matter.

Background

The procedural context of the Eclipse Aviation decision is interesting in itself.  The Plaintiff, a purchaser of aircraft from the Debtor, filed a motion to dismiss the Complaint it had previously filed as an adversary action.  Plaintiff originally filed the Complaint seeking declaratory relief that it possessed certain property interests in undelivered aircraft that were in the Debtor's possession.  During the course of the bankruptcy, Debtor was unable to consummate a sale of its assets and the case quickly converted to a chapter 7 liquidation.  Once a chapter 7 trustee (the "Trustee") was appointed, the Trustee sought to sell the estate assets including the planes that Plaintiff claimed an interest in.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Introduction

On August 12, 2010, Caribbean Petroleum Corporation filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  Caribbean Petroleum imports and distributes petroleum products in Puerto Rico through a network of 184 service stations.  This post will look at the events leading up to the company's filing for bankruptcy, as well as what the company hopes to accomplish while in bankruptcy.

One of the first documents Caribbean Petroleum filed with the Bankruptcy Court was the Declaration of Nicolas Pena (the "Pena Declaration"), Chief Financial Officer of the Debtor.  As stated in the Pena Declaration, Caribbean Petroleum's major assets include a deep water dock in San Juan, Puerto Rico, a "tank farm" containing 48 multipurpose tanks and 28 tanks that hold liquid petroleum gas.  In addition to the tanks and dock, Caribbean Petroleum owns six pipelines that connect the dock to the tank farm.  The company' s dock is the only on in San Juan harbor capable of servicing vessels up to 850 feet in length.  Pena Decl., pp. 6 - 7.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Introduction

Earlier this month, the Liquidating Trustee in the Intermet bankruptcy filed preference actions against various defendants.  This post will look at the nature of Intermet's business, why the company filed for bankruptcy and the circumstances behind the formation of the Liquidating Trust that is pursuing the preference actions.

As I often do on this blog, much of the information used in this post comes from information provided in the Debtors' Declaration in Support of its Chapter 11 Petitions.  Intermet filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware on August 12, 2008 (the "Petition Date").  In support of its bankruptcy filings, Intermet filed a Declaration of William H. Whalen, Intermet's Chief Financial Officer (the "Whalen Declaration").  The Whalen Declaration provides a good summary of Intermet's business operations and the events leading the company into bankruptcy.  A copy of the Whalen Declaration is available here.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Introduction

On August 3, 2010, Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware issued an opinion in the Qimonda bankruptcy addressing whether Google was entitled to an administrative claim against the Qimonda bankruptcy estate.  This post will look briefly at the facts underlying Google's claim, the holding of the Court and the basis for the Court's decision.  Click here to review the Court's Opinion in Qimonda. 

Background

Qimonda manufactured memory modules which it sold to various customers including Google.  Since the company's formation in 2006, it had sold hundreds of thousands of its memory modules to Google.  Pursuant to the terms and conditions of Google's purchase orders, defective modules were either returned, repaired or replaced at Qimonda's option.  Opinion, at pp. 1-2.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Introduction

American Safety Razor Company ("ASR"),  one of the largest manufacturers of shaving razors and blades, filed for bankruptcy protection in Delaware on July 28, 2010.  According to the  Declaration of ASR's Chief Financial Officer, Andrew Bolt (the "Bolt Declaration"), the company's net sales for 2009 totaled $330 million, down from the $351 million in sales achieved in 2008.  See Bolt Declaration, pgh. 11. 

Events Leading to Bankruptcy

Over 90% of ASR's earnings come from the sale of wet shave razors.  ASR markets its razors to retailers as a "value-priced alternative to more heavily advertised premium priced brands."  Bolt Dec., pgh. 13.  The company sells its razors under the trade names "Personna,"  "Matrix," "Magnum," "Mystique," "Solara" and "GEM."  Id. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Introduction

In July of this year, Ascendia Brands, Inc., began filing preference actions against various defendants who allegedly received payments from Ascendia.  According to the complaints, the defendants, many of whom were former customers of the company, received "avoidable" payments either before or after Ascendia filed for bankruptcy.  Citing various provisions of the Bankruptcy Code, Ascendia alleges that the recipients of these payments are required to return the funds to Ascendia.  This post will look briefly at Ascendia's business operations, why it filed for bankruptcy and what the next steps will likely be for the preference actions Ascendia filed with the Bankruptcy Court.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Earlier this month, Bettina M. Whyte, the SemGroup Litigation Trustee (the "Trustee") filed approximately 350 adversary actions against various creditors in the SemCrude bankruptcy.  The majority of the adversary actions are preference actions under 11 U.S.C. section 547 of the United States Bankruptcy Code.  Some of the adversary actions, however, allege defendants received fraudulent transfers from various SemCrude debtors (the "Debtors"). 

As stated in the Trustee's pleadings, Debtors filed for bankruptcy in July of 2008.  On November 30, 2009, Debtors' Fourth Amended Joint Plan of Reorganization (the "Plan") was confirmed by the United States Bankruptcy Court for the District of Delaware.  Debtors bankruptcy proceeding, as well as the Trustee's adversary actions, are before the Honorable Brendan L. Shannon. 

Pursuant to Plan,  the Trustee was appointed to oversee the SemGroup Litigation Trust.  Under the Plan, the Litigation Trust may pursue certain claims that would otherwise belong to the Debtors.  It is these claims that the Trustee seeks to liquidate through the various adversary actions.  

To read other posts on this blog concerning the SemCrude bankruptcy proceeding, click here.  Further, click here to read prior posts regarding developments in Delaware preference litigation, including a look at other recently commenced preference actions. 

-----------------------------------------

Jason Cornell is a bankruptcy attorney with Fox Rothschild LLP.  Jason practices in Fox Rothschild's Wilmington, Delaware office.  He may be contacted at 302 427-5512, or jcornell@foxrothschild.com.

• Email This
• Print
• Comments
• Trackbacks
• Share Link