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Category Archives: Recent Developments in Bankruptcy Law

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Third Circuit Rules that Failure to Disclose Third-Party Release Proves Fatal

Posted in Opinions, Recent Developments in Bankruptcy Law

In the recent Third Circuit decision of In re Lower Bucks Hospital, No. 13-1311 (3d Cir. July 3, 2014), the Third Circuit upheld the ruling of the Bankruptcy Court for the Eastern District of Pennsylvania that non-consensual releases were not part of the debtor’s plan of reorganization due to failure to adequately disclose the same to… Continue Reading

Delaware Bankruptcy Court Finds Bonus Plan Was Created in the Ordinary Course of Business

Posted in Recent Developments in Bankruptcy Law

On July 9, 2012, Judge Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware issued a memorandum opinion (the "Opinion"), in the Blitz U.S.A. bankruptcy proceeding addressing whether an employee bonus plan is a transaction made in the ordinary course of business under 11 U.S.C. 363(c)(1).  The court issued the… Continue Reading

Court in Interlake Material Handling Bankruptcy Dismisses Complaint Alleging Constructive Trust

Posted in Recent Developments in Bankruptcy Law

Introduction Earlier this year, Judge Kevin J. Carey, Chief Judge of the Delaware Bankruptcy Court, issued a decision in the Interlake Material Handling bankruptcy, whereby the Court dismissed a complaint that sought to impose a constructive trust.  The dispute in Interlake concerned the terms of a distributorship agreement (the "Agreement").  Pursuant to the terms of the… Continue Reading

Decision in Six Flags Bankruptcy Addresses Sufficiency of Pleadings Under Fed.R.Civ.P. 12(b)(6)

Posted in Recent Developments in Bankruptcy Law

Introduction Recently, the Delaware Bankruptcy Court in the Six Flags bankruptcy issued a decision addressing whether an adversary complaint alleged facts sufficient to overcome a motion to dismiss.  The Court’s decision provides analysis of recent decisions by the Supreme Court and the Third Circuit regarding standards for pleading.   More specifically, the Six Flags decision looks… Continue Reading

The Common Interest Privilege

Posted in Recent Developments in Bankruptcy Law

Below is a post from Michael Temin, senior counsel with Fox Rothschild.  Michael’s post looks at a recent decision by Judge Sontchi in the Leslie Controls bankruptcy. —————————————————————————– A discovery dispute gave the bankruptcy court an opportunity to rule on the common interest privilege which, the court said, has completely replaced the joint defense privilege… Continue Reading

Decision in Qimonda Bankruptcy Looks at Whether a Conversion Claim is Entitled to Administrative Priority

Posted in Recent Developments in Bankruptcy Law

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… Continue Reading

Decision in Spansion Bankruptcy Addresses When Court Should Appoint a Special Committee of Creditors or Equity Holders

Posted in Recent Developments in Bankruptcy Law

Introduction Recently, Judge Kevin J. Carey, Chief Judge of the United States Bankruptcy Court for the District of Delaware, issued a decision in the Spansion bankruptcy denying a motion for the appointment of an official committee of equity security holders.  See In re Spansion, Inc., et al., Case No. 09-10690(KJC)(December 18, 2009).  The decision is helpful as it… Continue Reading

Decision in Spansion Finds That Debtors Did Not Demonstrate Sound Business Judgment in Settlement of Patent Litigation

Posted in Recent Developments in Bankruptcy Law

Introduction On June 2, 2009,  Judge Kevin J. Carey, Chief Judge of the United States Bankruptcy Court for the District of Delaware, issued an opinion in the Spansion bankruptcy finding that the Debtors’ settlement of various patent cases was not the result of the "sound exercise of the Debtors’ business judgment."  Judge Carey’s decision in Spansion… Continue Reading

Decision in Goody’s Holds That Administrative Claims Under 503(b)(9) Apply to Goods, Not Services

Posted in Bankruptcy Case Update, Recent Developments in Bankruptcy Law

Introduction The Honorable Christopher S. Sontchi, presiding over the Goody’s bankruptcy in the United States Bankruptcy Court for the District of Delaware, issued a decision recently regarding the scope of administrative claims under 11 U.S.C. 503(b)(9).  Section 503(b)(9) provides that after notice and a hearing, there shall be an allowed administrative expense claim for "the… Continue Reading

Decision in SemCrude Interprets “Mutuality” Requirement for Setoffs Under Section 553 of the Bankruptcy Code

Posted in Bankruptcy Case Update, Recent Developments in Bankruptcy Law

Introduction The Bankruptcy Code allows for the setoff of "mutual debts" in a bankruptcy proceeding under 11 U.S.C. 553(a).  Section 553 makes no reference to non-mutual debts, which courts interpret to mean that non-mutual debts are not subject to setoff under the Bankruptcy Code.  Recently, in the SemCrude bankruptcy, the Honorable Brendan L. Shannon issued a… Continue Reading

When Is The Stalking Horse Break-up Fee A Benefit To The Bankruptcy Estate: Another Look at Calpine v. O’Brien Environmental Energy

Posted in Recent Developments in Bankruptcy Law

Today in the PPI Holdings bankruptcy,  the PPI debtors presented their bid procedures motion which sought approval of the procedures by which PPI would sell substantially all of its assets.  PPI’s motion also sought approval of a break-up fee for the stalking horse bidder.  In support of the break-up fee, PPI cited the Third Circuit’s decision in Calpine Corp. v…. Continue Reading

Using the Solvency Defense in a Preference Action: In re Bernard Technologies

Posted in Preference Litigation, Recent Developments in Bankruptcy Law

 Introduction In a recent opinion issued by the Honorable Kevin Gross of the United States Bankruptcy Court, District of Delaware,  the Court addressed the issue of whether a debtor was solvent when it made allegedly preferential transfers to the Defendant.  The Court’s decision provides a helpful analysis of the less frequent "solvency" defense to a preference… Continue Reading

Distributed Energy Decision Provides Analysis of Adequate Assurance and Executory Versus Non-Executory Contracts

Posted in Recent Developments in Bankruptcy Law

  Introduction In a recent decision in the Distributed Energy Systems bankruptcy ("DES" or "Debtors"),  the Honorable Kevin Gross of the United States Bankruptcy Court for the District of Delaware provided a concise discussion of what is required for a debtor to assume and assign an executory contract.  DES filed a motion seeking to assume and assign contracts with ePower and… Continue Reading

Decision in Powermate Holding Corp. Declines to Grant Administrative Claim Status to Employee WARN Act Claims

Posted in Recent Developments in Bankruptcy Law

Introduction In a decision that the Court deemed “one of first impression for this Circuit,” the Honorable Kevin Gross of the United States Bankruptcy Court for the District of Delaware, declined to grant administrative claim status to employee WARN Act claims, instead finding that the employees’ claims vested prior to the commencement of the bankruptcy… Continue Reading

American Home Mortgage Sheds Light on the Meaning of “Repurchase Agreement”

Posted in Recent Developments in Bankruptcy Law

Earlier this year, the United States Bankruptcy Court for the District of Delaware issued an important decision in American Home Mortgage, Inc. regarding the scope of the recently amended definition of a “repurchase agreement”.  Under the Bankruptcy Abuse Prevention Consumer Protection Act of 2005,  Congress broadened the Bankruptcy Code’s definition of  "repurchase agreement" to include the… Continue Reading

Linens N Things Bankruptcy Implements “Vendor Program”

Posted in Recent Developments in Bankruptcy Law

The United States Bankruptcy Court for the District of Delaware recently approved a Trade Vendor Payment Program (the “Vendor Program” or “Program”) in the Linens N Things Center, Inc., et al.(“Linens”), bankruptcy . According to Linens’ Motion to Approve Trade Vendor Payment Program, Linens created the Program in order to encourage trade creditors to extend… Continue Reading