Archives: Opinions

 

On August 9, 2016, Judge Kevin Carey of the Delaware Bankruptcy Court issued an Order both dismissing a complaint and striking a defendant’s Notice of Supplemental Authority.   The decision was issued in the Quantum Foods bankruptcy, in the adversary proceeding No. 16-50045.  A copy of the Opinion is available here.

On February 18, 2016, the Committee filed its complaint against the defendant, IPC, seeking to avoid and recover allegedly preferential transfers.  On April 25, 2016, IPC filed the motion to dismiss.  The Committee filed its response on May 23, 2016 and IPC filed a reply on June 6, 2016.  Then, on June 29, 2016, IPC filed a Notice of Supplemental Authority in Support of Motion to Dismiss.  On June 30, 2016 the Committee filed the Motion to Strike the notice of supplemental authority.  Opinion at *2.

Judge Carey quickly covered the standard governing motions to dismiss, which was provided by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), and was then distilled into a three-step process by the Third Circuit:

First, the court must “tak[e] note of the elements a plaintiff must plead to state a claim.” Second, the court should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth.” Finally, “where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.”

Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir. 2011).  Opinion at *3.  Judge Carey then states that the complaint contains “only a few vague factual allegations,” “fails to allege any facts to support a claim under § 502(d),” and “the information in the exhibit does not provide any context or describe the nature of the transfers.”  Opinion at *4-5.  He then dismissed the complaint.  However, as is the standard for Delaware Bankruptcy judges, he states that “leave to amend a complaint should be freely given when justice so requires” and gives the Committee leave to amend its complaint.  Opinion at *5.

Judge Carey then turns to the motion to strike, looking initially to Local Rule 7007-1(b), which states: No additional briefs, affidavits or other papers in support of or in opposition to the motion shall be filed without prior approval of the Court, except that a party may call to the Court’s attention and briefly discuss pertinent cases decided after a party’s final brief is filed or after oral argument.  Local Rule 7007-1(b).  As IPC did not seek permission for its additional filing, Judge Carey granted the motion to strike without further ado.

One of the first practice pointers I received when I started practicing law was to regularly review the the Local Rules to ensure that I always comply with them.  I have seen the Local Rules violated with regularity, but only with prior court approval.  This is NOT one of those times when it is better to ask for forgiveness than permission.

Defenses to a Preference Action

The Bankruptcy Code provides creditors with many defenses to preference actions. While the efficacy of the preference defendants’ attempt to reduce exposure in this case is still in question, it does not look like it will be an easy decision for the court or a briefly litigated issue.  Other defenses are more common, and more easily gauged.  Included among these are the “ordinary course of business defense” and the “new value defense.” For reader’s looking for more information concerning claims and defenses in preference litigation, attached is a booklet I prepared on the subject: “A Preference Reference: Common Issues that Arise in Delaware Preference Litigation.”

John Bird is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  John is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach John at (302) 622-4263 or at jbird@foxrothschild.com.

On August 2, 2016, Judge Brendan L. Shannon of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Refco Public Commodity Pool, L.P. bankruptcy, Case No. 14-11216.  A copy of the Opinion is available here.  The Opinion holds that this Debtor’s failure to file its taxes was due to reasonable cause, and the associated tax penalties are, therefor, claims that can be excused and disallowed.

Judge Shannon provides extensive background in this case, as the legal issues are highly fact specific and require him to adjudicate the debtor’s tax liability.  Opinion at *6.  The history of the debtor reads like a painful drama.  The partnership invested nearly everything into a managed futures fund (“SMFF”).  Then, SMFF failed, filing for bankruptcy in 2005.  At that point, SMFF’s financial reports and accounting system fell into disarray.  The debtor, claiming that they could not rely upon the financial reports of SMFF, failed to file tax returns for 2006-2008.  Opinion at *16.

The IRS filed a claim asserting a general unsecured claim of $4,112,000 for the fines incurred for failing to file tax returns.  Opinion at *5.  As provided by the Bankruptcy Code, the Court “may determine the amount or legality of any tax, any fine, or penalty relating to a tax…”  Opinion at *6.  According to the Internal Revenue Code, a taxpayer can obtain a waiver of penalties for failing to file a partnership return if the failure was “due to reasonable cause and not due to willful neglect.”  Opinion at *8.

Here, Judge Shannon held that the debtor’s failure to file its tax returns was reasonable and “arose from events beyond its control.”  Opinion at *12.  The debtor had two options in this instance, file tax returns it believed to be extremely inaccurate, or file no returns.  Because a filer must declare that its tax return is “true, correct, and complete” under penalty of perjury, the debtor was reasonable in not filing its return.  Opinion at *15-16.  Not only was it reasonable before failing to file, it was reasonable after failing.  Opinion at *17.  Both the IRS and the debtor agreed that this was not a case of willful neglect and Judge Shannon agreed.  Opinion at *17.

This is one of a few rare cases in which tax penalties were denied by the Bankruptcy Court.  And as a review of the Opinion shows, it is a highly fact specific inquiry and, if this case is any indicator, requires debtors to meet a high evidentiary burden.  I would recommend that anyone considering filing bankruptcy in an effort to avoid penalties for failing to file their taxes have a thorough discussion with a legal professional as this is a very risky proposition.

John Bird practices with the law firm Fox Rothschild LLP in Wilmington, Delaware. You can reach John at 302-622-4263, or jbird@foxrothschild.com.

In a 9-page opinion issued in the Syntax-Brillian case on July 20, 2016, Judge Kevin J. Carey denied the motion of equity holders in Syntax-Brillian seeking to terminate the Liquidation Trustee (the “Trustee”).  A copy of the Opinion is available on the Court’s website: Here.

The Movants seek to terminate the Trustee, arguing that he should be dismissed due to “lack of standing” and “lack of due process”.  Opinion at *4.  The Movants are, in essence, rearguing issues they raise in prior pleadings; that first day affidavits were based on fraud, and as such, all events in the chapter 11 case must be vacated.  Id.  We discussed the opinion that Judge Shannon issued in response to these arguments in a prior blog post: Here.  Quoting Judge Shannon’s opinion, Judge Carey similarly dismisses the Movants’ arguments as to lack of standing.  Opinion at *4-6.

The Movants’ lack of due process argument is, in essence, an argument that the Trustee’s settlement with certain former equity holders was unfair because it did not treat all equity holders the same.  Opinion at *7.  Again, Judge Carey holds that Judge Shannon’s prior opinion addressed this issue, and “the Movants have failed to provide any reason to re-visit that decision.”  Id.

“A party seeking removal of a trustee must prove actual injury or fraud.”  Opinion at *8.  In concluding his Opinion, Judge Carey states:

… the Movants have not proved that they have been harmed by the actions of the Trustee or his professionals. They have not provided any evidence that the Trustee has failed to perform his duties under the Plan and the Liquidation Trust Agreement. There is no evidence of gross negligence, breach of fiduciary duty, breach of trust, and reckless or willful mishandling of the Liquidation Trust Assets by the Trustee.

John Bird practices with the law firm Fox Rothschild LLP in Wilmington, Delaware. You can reach John at 302-622-4263, or jbird@foxrothschild.com.

On July 25, 2016, Judge Kevin Carey of the Delaware Bankruptcy Court issued a thorough decision pursuant to a motion for judgment on the pleadings analyzing the intersection of a preference defendant’s post-petition administrative claim and their preference exposure.  A copy of the Opinion is available here.

In the Opinion, Judge Carey cites the Third Circuit’s Friedman’s decision extensively:  Friedman’s Liquidating Tr. v. Roth Staffing Co., LP (In re Friedman’s, Inc.), 738 F.3d 547 (3d Cir. 2013).  According to the Friedman’s court, “As articulated by the Third Circuit in Friedman’s, the preference analysis cannot be affected by post-petition activity.”  Further, “The judicial consensus is that setoff is only available in bankruptcy when the opposing obligations arise on the same side of the . . . bankruptcy petition date.”  Opinion at *7.

Judge Carey provides a thorough explanation of the various theories by which preference defendants may attempt to reduce their preference liability through post-petition transfers.  He holds that a post-petition transfer cannot act as new value to reduce a preference payment, but is not prohibited from offsetting a preference payment as both arise post-petition.  Opinion at *7-8.  He then turns to the plaintiff’s argument in its motion for judgment on the pleadings that pursuant to Section 502, the defendant is not entitled to any payment, including administrative payments, until the preference payment is satisfied.  In the Opinion, Judge Carey holds to the contrary, concluding his Opinion with the following quote from the Friedman’s decision:

If it is a rule in bankruptcy that all creditors must be treated equally, surely the exceptions swallow the rule. It could be said that some creditors are treated more equally than others. There are special provisions for aircraft leases and shopping center leases, and some claims are given priority over others. The balancing of interests in, for instance, wage orders, has been held to justify the type of unequal treatment condemned in cases that would include the post-petition payment in the preference analysis. See, e.g., In re Primary Health Sys., Inc., 275 B.R. 709, 709 (Bankr. D. Del. 2002) (holding payments pursuant to court order allowing debtor to pay employee wages and benefits to be out of reach of § 547). Inequality per se is not to be avoided; indeed, reasoned and justified inequality sometimes prevails, usually based on what is in the best interest of the estate. For this reason, the courts positing that the interpretation that “results in absolutely equal treatment of all unsecured claims” is the “most reasonable interpretation of section 547(c)(4),”. . . are misguided.

Opinion at *10.

Defenses to a Preference Action

The Bankruptcy Code provides creditors with many defenses to preference actions. While the efficacy of the preference defendants’ attempt to reduce exposure in this case is still in question, it does not look like it will be an easy decision for the court or a briefly litigated issue.  Other defenses are more common, and more easily gauged.  Included among these are the “ordinary course of business defense” and the “new value defense.” For reader’s looking for more information concerning claims and defenses in preference litigation, attached is a booklet I prepared on the subject: “A Preference Reference: Common Issues that Arise in Delaware Preference Litigation.”

John Bird is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  John is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach John at (302) 622-4263 or at jbird@foxrothschild.com.

John O’Toole writes:

On July 13, 2016, Judge Kevin J. Carey denied a former shareholder’s (the “Movant”) Motion to Proceed Qui Tam (the “Motion”) against the chapter 11 debtors (the “Debtors”) in In re Syntax-Brillian Corporation, Case No. 08-11407 (KJC) (Bankr. D. Del. Jul. 13, 2016).  A copy of the opinion is available here.  The Motion would have allowed the Movant to exercise his power under the False Claims Act (“FCA”) to bring a civil action on behalf of the United States against, among others, the Debtors.  As a threshold matter, Judge Carey determined that because the Movant had previously entered into a “Settlement Agreement Resolving Shareholder Claims” by which he agreed to release any claims “concerning, arising from or related to” the Debtors and the chapter 11 cases, the Movant lacked standing to bring the Motion.  Despite the Movant’s lack of standing, the Court heard the Motion because former shareholders who were not parties to the Settlement Agreement, and thus had standing, filed papers in support of the Motion.

The Court ultimately denied the Motion because the Movant failed to “establish a prima facie case under the [FCA].”  Opinion at *6.  In order to proceed qui tam “under the [FCA] a plaintiff must prove: (1) the defendant presented or caused to be presented to an agent of the United States a claim for payment; (2) the claim was false or fraudulent; and (3) the defendant knew the claim was false or fraudulent.”  Opinion at *6.  The Movant’s allegations suggested only that the government should have taken action to protect him and other former shareholders from the alleged fraud perpetrated by the Debtors, not that the government itself had been aggrieved by the Debtors’ fraud.  Thus, as the “primary purpose of the FCA is to indemnify the government…against losses caused by a defendant’s fraud,” Judge Carey determined that the Motion was deficient.  Opinion at *5.

Also of note is a footnote in the Court’s opinion that indicates that, even if the Movant had standing and the assertions in the Motion validly stated a claim under the FCA, the Court does not have jurisdiction.  The Court stated that it “lacks jurisdiction to determine [the Motion] because qui tam suits under the [FCA] must be heard in a federal district court.”  Opinion at *7 n. 18.


John O’Toole is a summer associate, resident in the firm’s Wilmington office.

On July 18, 2016, Judge Walrath issued a concise written opinion ruling upon whether an executive’s claim for unpaid stock-based compensation was an equity security or rather a general unsecured claim against the Debtors’ estate.  The opinion is styled as GSE Environmental, Inc., et al. v. Sorrentino (In re GSE Environmental, Inc., et al.), Adv. Pro. No. 16-50377 (MFW) (Bankr. D. Del. July 18, 2016).

Defendant was the Debtors interim and CEO starting July 1, 2013, with a salary of $100,000 per month in cash and $86,000 per month in stock.  By the time of Debtors’ filing, Defendant’s stock compensation had been unpaid. Accordingly, Defendant filed a general unsecured claim for the unpaid stock.  The Debtors filed a complaint asserting that the amount owed for the share-based component of the Defendant’s compensation constitutes an equity security.  Defendant disagreed, contending that the amounts owed should be characterized as a general unsecured claim.  Debtors moved for judgment on the pleadings.

The Bankruptcy Code defines “equity security” to encompass “warrants or rights . . . to purchase, sell . . . a share, security, or interest” in a corporation. 11 U.S.C. § 101(16) (A),(C). Common stock received in exchange for labor constitutes a purchase and sale of a security under the Code. Frankum v. Int’l Wireless Commc’ns Holdings, Inc. (In re Int’l Wireless Commc’ns Holdings, Inc.), 279 B.R. 463, 467 (D. Del. 2002).

The Defendant contended that the value of stock owed to him constitutes a claim because the stock component of his compensation was calculated as a fixed dollar amount rather than a fixed number of shares.  Judge Walrath disagreed, stating that “[a]lthough the quantity of stock owed to the Defendant under the amended employment agreement was based on a fixed dollar amount, the fact remains that the agreement entitled the Defendant only to company stock, not cash.”  Moreover, “the stock rights received under the amended employment agreement constitute a purchase and sale of a security because they were given in exchange for the Defendant’s labor.”

Thus, the Court found that Defendant’s stock-based compensation fits within the Code’s definition of equity security, and granted Debtors’ motion on the pleadings.

Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.

While many people only see the glamorous, large Chapter 11 cases filed in the Delaware Bankruptcy Court, the Court still handles individual bankruptcies – treating them with just as much respect as any other case.  On July 8, 2016, the chief bankruptcy judge, Brendan L. Shannon, issued an opinion valuing the mobile home of Ms. Anita Barnard.  A copy of the Opinion is available here.  This was a situation when the valuation methodology was agreed upon – yet there are still some judgment calls.

Case law in this jurisdiction teaches, that the NADA Retail Value Guidebook for Manufactured and Mobile Homes (“NADA”) method is the proper resource for mobile home valuations.  Opinion at *1.  The case law then requires that, for cram-down purposes, a formula is applied to determine the appropriate interest rate – Prime plus 1-3 percent.  While lenders will always aim for the top, the borrower will, naturally, aim for the lowest possible rate.  This is exactly what happened here.

While Judge Shannon does not provide extensive analysis of why he selected the rate he did, he ultimately held that “based on the record” the lower of the proposed rates was appropriate.  Opinion at *3.  I can’t help but wonder – if the lender had sought a more moderate rate, rather than going for the max, would they have received it?  This is likely a question that will never be answered, as what lender would voluntarily reduce their demand – and thus the perceived strength of their position.

John Bird practices with the law firm Fox Rothschild LLP in Wilmington, Delaware. You can reach John at 302-622-4263, or jbird@foxrothschild.com.

On June 29, 2016, Judge Sleet of the Delaware District Court entered an order denying a motion for stay of the Debtors’ plan confirmation pending appeal.  A copy of the related Opinion is attached here.

Morris Propp II and Morris Propp II Foundation (the “Movants”) had filed an objection to the Debtors’ plan on the basis that they were not allowed to participate in the DIP loan.  After making significant waves in the Debtors’ bankruptcy proceedings, the Debtors conceded the point and provided at confirmation that any noteholders who so desired would be allowed to participate in the syndication of the DIP loan.  Opinion at *3.  The Court determined that such a concession mooted the Movants’ objection and confirmed the Debtors’ plan.

The Movants then elected to participate in the DIP loan’s syndication.  Opinion at *3.  As part of the process of participating, the Movants agreed to be bound by the Restructuring Support Agreement (the “RSA”).  Opinion at *4.  The RSA prohibits any signatory thereto from opposing confirmation.

The Movants appealed the decision approving confirmation, and the Debtors filed a motion to enforce the RSA.  The Bankruptcy Court granted the Debtors’ motion, holding that the Movants were “sophisticated investors, and that despite counsel’s contention that Appellants executed the Subscription Documents without consulting their counsel, ignorance of the law is no defense.”  Opinion at *5.

The Movants then filed the appeal and motion to stay pending appeal.  In relatively short order, Judge Sleet examined the four factor test created by the Third Circuit:  (1) whether the movant has made “a strong showing” that it is likely to succeed on the merits; (2) whether the movant will be irreparably injured absent a stay; (3) whether a stay will substantially injure other interested parties; and (4) where the public interest lies. Republic of Phil. v. Westinghouse Electric Corp., 949 F.2d 653, 658 (3d Cir. 1991).  Opinion at *7.  In a later case, the Third Circuit provided that the first two factors of this four factor test were gating issues, and that “if the movant does not make the requisite showings on either of these first two factors, the inquiry into the balance of harms and the public interest is unnecessary…”  Opinion at *9.

Moving through the first two factors, Judge Sleet determined that the Movants failed to meet their burden as to both, and quickly denied their motion for stay pending appeal.  Opinion at *14.

John Bird practices with the law firm Fox Rothschild LLP in Wilmington, Delaware. You can reach John at 302-622-4263, or jbird@foxrothschild.com.

On June 22, 2016, Judge Laurie Selber Silverstein of the Delaware Bankruptcy Court ruled on a motion to for class certification in the PacSun bankruptcy, Case No. 16-10882.  In 2011, two plaintiffs filed actions under the California Labor Code Private Attorneys General Act (“PAGA”), alleging violations of California wage and hour laws.  One of the Plaintiffs was granted class certification in February, 2016.  After PacSun filed for bankruptcy, these plaintiffs moved for authority to file bankruptcy proofs of claim as representatives of the PAGA class for the class.  The “Opinion” is available here.

Because of the clarity and length of the Opinion, I have included only a cursory summary here.  However, it is worth noting that instances in which bankruptcy courts approve of class treatment for class-action claims is not terribly common.  Often, the Court will rule that the bankruptcy claims process is just as likely to provide adequate notice and recovery to potential claimants as the class-action process – but without the additional costs of class counsel (which is often upwards of 25% of any class recovery).  As held by the Third Circuit in a prior case:  “All creditors were given notice of the insolvency proceedings, and they were given the opportunity to file claims…  Furthermore, this is not a plenary suit but a liquidation proceeding which should be concluded as expeditiously as possible. We see no indication that a class action designation would have such a result…”  Opinion at *7-8 (quoting SEC v. Aberdeen Securities Co., 480 F.2d 1121, 1128 (3d Cir. 1973)).

As Judge Silverstein rules in this case, however, “Aberdeen does not stand for the principle that class claims are, as a rule, impermissible in bankruptcy case.  Opinion at *9.  Instead, she looks to the Musicland factors: (1) whether the class was certified pre-petition; (2) whether the members of the putative class received notice of the bar date; and (3) whether class certification will adversely affect the administration of the estate.  Opinion at *10 (citing In re Musicland Holding Corp., 362 B.R. 644, 654-55 (Bankr. S.D.N.Y. 2007)).

In this case, the first factor was met (the class was previously certified), the second factor was met (the Debtor limited notice to only a portion of former employees, not all employees who were members of this class, and Judge Silverstein held that regardless of whether certification occurred, she would have to address these claims, satisfying the third factor.  Opinion at *12.  Thus, she determined that it was appropriate that she exercise her discretion under Rule 7023.  She then analyzed the elements and arguments around Federal Rule 23, determining that it was satisfied in this case.  This portion of the Opinion spans pages 13-20.

Ultimately, Judge Silverstein granted the motion in part, certifying nearly the exact same class as had been previously certified (the differences are in bold below):

Class: All hourly, non-exempt employees of PacSun working in retail locations in the State of California from March 18, 2007 through the 181st day prior to the filing of the bankruptcy petition concerning Ms. Beeney’s claims for:

a) failing to authorize and permit employees to take duty-free rest breaks every four hours or major fraction thereof and to compensate employees therefor; and

b) requiring employees to undergo security checks and perform closing duties off-the-clock without compensation.

My $.02

At the end of the day, no matter how infrequent relief of a specific type is granted, if you have met ALL of the statutory requirements and you can successfully distinguish contrary case law, you can obtain the relief you seek.  In some cases it is easy – but those cases almost always end up settling.  However, a litigant will not settle unless they will get more from settling than they would after getting a Court ruling and paying their lawyers – So if they feel certain of winning, their settlement range is much narrower than if they are uncertain of the outcome.  In a case like this, where certification of a class is infrequent, settling becomes a more difficult proposition.

John Bird practices with the law firm Fox Rothschild LLP in Wilmington, Delaware. You can reach John at 302-622-4263, or jbird@foxrothschild.com.

In the recent decision of Gavin Salmonese, LLC v. Shyamsundar, et al. (In re AmCad Holdings, LLC, et al.) (Bankr. D. Del. June 14, 2016), Judge Walrath considered whether a liquidation trustee had standing to bring a claim for breach of fiduciary duty against the debtors’ former D&Os when the post-confirmation trust was the recipient of a wholesale assignment of causes of action, without specifying breach of fiduciary duty claims.

The answer is no.  The Court stated that “related to” jurisdiction post-confirmation is much more narrow and may only be exercised over matters which have a “close nexus to the bankruptcy plan or proceeding.” Binder v. Price Waterhouse & Co., LLP (In re Resorts Int’l, Inc.), 372 F.3d 154, 164–65 (3d Cir. 2004).  A chapter 11 plan that retains jurisdiction over a specific cause of action generally satisfies the close nexus requirement.  BWI Liquidating Corp. v. City of Rialto (In re BWI Liquidating Corp.), 437 B.R. 160, 166 (Bankr. D. Del. 2010).  However, a wholesale assignment of causes of action from the bankruptcy estate to a post-confirmation trust fails to establish a close nexus as to any specific cause of action. Insilco, 330 B.R. at 523-26.

Here, the Plan provides that the Court shall retain jurisdiction over “Causes of Action,” a term broadly defined to include:

all of the Debtors’ actions, causes of action, choses in action, liabilities, suits, debts, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, third-party claims, counterclaims, and crossclaims, whether known or unknown, reduced to judgment or not reduced to judgment, liquidated or unliquidated, contingent or non-contingent, matured or unmatured, disputed or undisputed, secured or unsecured, assertable directly or derivatively, existing or hereinafter arising, in law or equity or otherwise, based in whole or in part upon any act or omission or other event occurring prior to the Petition Date, or during the course of the Bankruptcy Cases, through, and including the Effective Date, including but not limited to, the Avoidance Actions and Trust Claims.

The Court found that nowhere in the definition of “Cause of Action” or elsewhere in the Plan are specific breach of fiduciary duty claims against the Officer Defendants or Manager Defendants (the named defendants) mentioned.  However, the Court provided that even if the “Cause of Action” definition encompasses those claims, a wholesale assignment of claims to a post-confirmation trust is insufficient to establish a close nexus with respect to any individual claim.  Thus, the Court found that the Trust lacked standing to bring breach of fiduciary duty claims against the D&Os.

Further, the Court dismissed the preference claims.  The Complaint only alleged that “numerous Managers of the Debtor caused [AmCad Holdings, LLC] to repay the loans that those Managers made to the company.” (Adv. D.I. 1 at 10.)  The Complaint fails to indicate the loan, the date or amount of each payment of the loans, or who was repaid.  However, alleged preferential transfers must be identified with particularity to ensure that the defendant receives sufficient notice of what transfer is sought to be avoided.  Thus, the Court dismissed the Trust’s avoidance actions, and the disallowance of claims under Section 550.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.