Information on Corporate Bankruptcy Proceedings in Delaware and Throughout the United States
Because no recent opinions have been published by the Delaware Bankruptcy Court, I wanted to touch on a subject that is vital in nearly every preference or fraudulent transfer case: The Statute of Limitations For A Preference Claim
A. Statute of Limitations
The debtor has two years from the date it filed its petition for…
Very often in the course of a bankruptcy proceeding, a creditor with a pending lawsuit against the debtor will need to obtain relief from the automatic stay in order to continue to prosecute the pre-petition litigation. For example, personal injury claimants who seek to recover solely against an insurance policy of a debtor may obtain…
Can a financially distressed be “forced” into bankruptcy by its creditors? In other words, is it possible for creditors to subject a distressed entity into an involuntary bankruptcy proceeding?
The answer is yes. Under Section 303 of the Bankruptcy Code, a debtor can be “forced” into an involuntary bankruptcy. 11 U.S.C.§ 303(b)(1). If a company…
Under Section 503(b)(9) of the Bankruptcy Code, creditors may receive administrative-expense priority for the value of goods “received” by the debtor within 20 days before the debtor’s bankruptcy filing in which the goods have been sold to the debtor in the ordinary course of business. 11 U.S.C. § 503(b)(9).
The question becomes: when are goods…
What remedies do you have to recover goods shipped to a company in the weeks leading up to its bankruptcy? As to those goods shipped 45 days prior to a debtor’s filing, Section 546(c) of the Bankruptcy Code provides a reclamation right to creditors to recover such goods. This may provide you with the ability…
When will your company’s Section 503(b)(9) claim be paid? Under normal circumstances, Section 503(b)(9) claims are paid when the debtor makes a final distribution to creditors. However, a Section 503(b)(9) creditor can file a motion to demand immediate payment of its claim. This article will address the standard employed by the Bankruptcy Court in determining…
As discussed in the prior post, creditors may receive administrative-expense priority for “the value of goods received by the debtor within 20 days before” the debtor’s bankruptcy filing “in which the goods have been sold to the debtor in the ordinary course of business.” 11 U.S.C. § 503(b)(9).
The question then becomes what constitutes…
It is your worst nightmare. You ship goods to a company, only to find out that shortly after shipment, it files for bankruptcy. Now, instead of receiving payment for those goods, you are simply one of many creditors of the debtor’s estate. What remedies do you have under the Bankruptcy Code to recover the amount…
Summary
When a company files for bankruptcy, they gain a number of protections under federal law. One of these protections is the “automatic stay” provided by 11 U.S.C. § 362. The automatic stay makes it illegal to continue prosecuting, or to initiate, an action against the debtor who is in bankruptcy. Even if that debtor…
There are generally three types of claims in a bankruptcy proceeding: unsecured claims, secured claims and administrative expense claims. Section 503 of the Bankruptcy Code governs the allowance of administrative expense claims. Section 503 provides that “after notice and a hearing, there shall be allowed administrative expenses…, including the actual and necessary costs and expenses…
