Recently, the Plan Administrator for the Goody’s Family Clothing bankruptcy commenced adversary actions against various defendants in the United States Bankruptcy Court for the District of Delaware. The Goody’s Plan Administrator was appointed pursuant to Goody’s plan of reorganization. The Bankruptcy Court approved Goody’s plan on October 7, 2008, approximately four months after the company filed for bankruptcy.
Goody’s Second Bankruptcy Filing
Goody’s emergence from bankruptcy was short lived. On January 13, 2009, the reorganized Goody’s filed another petition for bankruptcy in Delaware. Goody’s second bankruptcy, also filed as a chapter 11 reorganization, began only three months after the company’s plan of reorganization was approved by the Court in the first bankruptcy proceeding.
The Preference Actions
The preference actions recently filed by the Plan Administrator seek the recovery of transfers made prior to the commencement of the first bankruptcy proceeding. According to recent court filings, the Plan Administrator filed the preference actions in an effort to offset any avoidable transfers against allowed claims under section 503(b)(9) of the Bankruptcy Code. These adversary actions, along with both of Goody’s bankruptcy proceedings, are before the Honorable Christopher S. Sontchi. Click here to review a prior post from this blog discussing a decision by Judge Sontchi in the Goody’s bankruptcy proceeding.