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
Opinion in AES Thames – A Pro-Defendant Interpretation of the Ordinary Course of Business Defense
In a 9 page decision signed March 3, 2016 in the AES Thames bankruptcy, Judge Carey of the Delaware Bankruptcy Court held that the recipient of allegedly preferential transfers had received the transfers from the Debtor in the ordinary course of business. He thus concluded that the Trustee could not avoid and recover the transfers…
Using the Solvency Defense in a Preference Action: In re Bernard Technologies
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 action. Further, the decision provides guidance regarding the evidentiary issues that arise when a party raises this defense.
The Court issued its decision in Miller v. Barenberg, et al. (In re Bernard Technologies, Inc.), Adv. No. 06-51017(KG), slip op. (Bankr.D.Del. Dec. 5, 2008). In Bernard Technologies, George Miller, the chapter 7 Trustee and plaintiff, sought to recover pre-petition transfers paid to Bernard’s former CEO, Dr. Sumner Barenberg (the "Defendant"). As an alleged "insider," the Trustee sought to recover transfers made to the Defendant during the one year prior to Bernard Technologies (the "Debtor") filing for bankruptcy. One of the defenses raised by the Defendant was that the Debtor was solvent during both the 90 day preference period, as well as the one year preference period applied to insiders.
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