In an 11 page decision signed March 29, 2016, Judge Walrath of the Delaware Bankruptcy Court revised a calculation of new value pursuant to an order from the District Court remanding the case. Judge Walrath’s opinion is available here (the “Opinion”). Numerous posts on this blog discuss other opinions issued by the Delaware Bankruptcy Court dealing with preference payments, as can be seen here. PREFERENCE OPINION POSTS.
This matter was remanded from the District Court on the appeal of the Bankruptcy Court’s decision dated July 17, 2013. In that opinion, Judge Walrath had ruled that (i) $781,702.61 of pre-petition transfers to Prudential (the Defendant) were preferential; (ii) Prudential had a new value defense totaling $128,379.40; and (iii) the Trustee was not entitled to prejudgment interest.
After both parties appealed, the District Court ruled that post-petition new value was not protected and that the Plaintiff was entitled to pre-judgment interest. Both parties rested after argument and without presenting any additional All that was left for Judge Walrath to do in this Opinion was to determine the total transfers protected pursuant to the new value defense and how much interest to award the Plaintiff.
This Opinion illustrates the careful deference that the District Court and Bankruptcy Court pay to the Opinions of the Third Circuit. In particular in this case, the Bankruptcy Court cites to Hechinger Investment v. Universal Forest Products (In re Hechinger), 489 F.3d 568, 580-81 (3d Cir. 2007). For a quick primer on preference litigation, please take a look at the Preference Reference which I co-authored. As expected, we have paid particular attention in the Preference Reference to the opinions of the Third Circuit.