Delaware Chancery Law Blog
The Delaware Court of Chancery is widely considered the preeminent forum for resolving disputes involving the internal affairs of the multitude of Delaware corporations and other business entities through which a vast amount of the world's commercial affairs is conducted. Join Carl as he helps guide you through the complex landscape of legal issues and analysis arising before this Court.
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Delaware Bankruptcy Litigation Blog
Carl shares his knowledge of Delaware bankruptcy proceedings in a blog entitled, "Delaware Bankruptcy Litigation." He offers his take on corporate bankruptcy proceedings not only in Delaware but throughout the United States, as well as industry insight on topics such as preference litigation, tenant bankruptcy and defending avoidance litigation.
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Recent Blog Posts

  • Sanjel (USA) Inc. – Chapter 15 Creditors May Challenge Reach of Stay in Recognition Order A recent decision by the United States Bankruptcy Court for the Western District of Texas in In re Sanjel (USA) Inc., et al., Case No. 16-50778-CAG (Bankr. W.D. Tex. July 29, 2016) explains that in a Chapter 15 case, the U.S. bankruptcy court will not always apply the law of the foreign jurisdiction to U.S. creditors and U.S.-based claims.  Specifically, the case addresses whether it is appropriate for a bankruptcy court to modify or limit a foreign stay through changes to... More
  • United States Trustee Meeting Room Change According to the United States Bankruptcy Court for the District of Delaware’s website, the meeting room for the United States Trustees has been changed from the second floor room 2112 to the third floor room of 3209 in the J. Caleb Boggs Federal Building, 844 N King Street, Wilmington DE 19801. The change went effective October 4th, 2016. Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  You can reach Carl at (302) 622-4272 or at [email protected]... More
  • Local Rules Comment Period According to the United States Bankruptcy Court for the District of Delaware’s website, the Court has instituted an annual process to review and consider comments and revisions to its Local Rules.  See announcement here.  The comment period is October 1, 2016 through October 31, 2016.  All comments received will be considered by the Local Rules Committee. Revisions to the Local Rules will be effective February 1, 2017. Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  You can reach Carl... More
  • Mootness Fees Granted to Stockholder Challenging Bylaw Provision In the recent decision of Jay Frechter v. Cryo-Cell International, Inc., Civil Action No. 11915-VCG (Del. Ch. Oct. 7, 2016), the Court of Chancery granted a mootness fee in connection with a lawsuit brought by a stockholder challenging a bylaw provision.  The bylaw provision at issue indicated that directors could be removed “for cause” at a “special meeting” of stockholders.  The plaintiff asserted that under Section 141(k) of the Delaware General Corporation Law, stockholders have the right to remove directors without cause, and... More
  • Chancery Distinguishes Pre- and Post-Close Disclosure Claims The recent decision of Nguyen v. Barrett, C.A. No. 11511-VCG (Del. Ch. Sept. 28, 2016) provides a useful discussion of pre- and post-close disclosure claims.  The action involved a challenge to a merger agreement, brought pre-close, alleging inadequate price and process, as well as some thirty disclosure violations.  However, in plaintiff’s motion for preliminary injunctive relief, the Plaintiff pursued only his “serious” disclosure violation, involving lack of disclosure of purportedly material financial information. The Court denied the preliminary injunction motion. The... More
  • Delaware Bankruptcy Court Now on Twitter The Delaware Bankruptcy Court announced recently that it is now on Twitter.  You can follow the Court and receive various updates here: Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  You can reach Carl at (302) 622-4272 or at [email protected]... More
  • Chancery Dismisses Complaint – Causes of Action Previously Released In the recent opinion of Geier v. Mozido, LLC, C.A. No. 10931-VCS (Del. Ch. Sept. 29, 2016), Vice Chancellor Slights dismissed the complaint because the claims sought therein were previously released due to a previous settlement.  The Court provides a thorough yet concise discussion of the applicable tenets of contract construction relating to the releases at issue.  The Court then interpreted the unambiguous language of the settlement and release language to find that the claims asserted were barred.  The motions... More
  • Chancery Rules Upon Breach of Non-Competition and Non-Solicitation Claims – Laches Defense Denied The Court of Chancery has recently issued a string of decisions, including Kraft v. WisdomTree Investments, Inc. in which it has tightened the application of the equitable defense of laches to make it more likely that a claim brought after the actual or presumptive statute of limitations has expired will be dismissed. However, in the recent Chancery decision of inTEAM Associates, LLC v. Heartland Payment Systems, Inc., C.A. No. 11523-VCMR (Del. Ch. Sept. 30, 2016), the Court declined to bar claims under... More
  • Fee Award Denied to Litigation Funding Firm The Court of Chancery recently denied a fee award to a litigation funding firm in the decision of Judy v. Preferred Communication Systems, Inc., C.A. No. 4662-VCL (Del. Ch. Sept. 19, 2016).  There, Vice Chancellor Laster denied an equitable fee award on multiple grounds: Movant gratuitously financed the litigation brought by plaintiff, and as a voluntary financier, movant cannot seek an equitable fee award; Movant financed plaintiff’s attempt to take over the company, and case law has held that a movant cannot obtain... More
  • Bankruptcy Code Section 303(i) Does Not Preempt State Law Claims by Non-Debtors In Rosenberg v. DVI Receivables XVII, LLC, 2016 WL 4501675 (3d Cir. August 29, 2016), the United States Court of Appeals for the Third Circuit held that Section 303(i) of the United States Bankruptcy Code does not preempt state law claims by non-debtors for damages arising from the filing of an involuntary bankruptcy petition. The Petitioning Entities filed involuntary bankruptcy petitions against Mr. Rosenberg and his affiliated entities.  The involuntary petitions were dismissed because the entities were not Rosenberg’s creditors.  Rosenberg subsequently... More
  • Chancery Denies Interlocutory Appeal of Spoilation Issues The Court of Chancery recently ruled on a request for interlocutory appeal as it related to the Court’s rulings on spoliation issues.  In the decision of Chrome Systems, Inc. v. Autodata Solutions, Inc., et al., C.A. No. 11808-VCG (Del. Ch. Sept. 21, 2016), Vice Chancellor Glasscock declined to certify the interlocutory appeal. Plaintiff brought the case alleging that defendants improperly dissolved a joint venture of the parties.  By previous bench ruling, the Court found that the parties contractually agreed to arbitrate... More
  • Bankruptcy Court Denies Motion to Compel Arbitration In the recent decision of FBI Wind Down Inc. Liquidating Trust, by and through Alan D. Halperin, as Liquidating Trustee, v. Heritage Home Group, LLC, et al., Adv. Pro. No. 15-51899 (CSS) (Bankr. D. Del. Sept. 15, 2016) Judge Sontchi considered whether motion to compel the arbitration of several claims.  For the reasons set forth below, the Court denied the motion. Background Heritage Home Group LLC (“Heritage”), purchased substantially all of the Debtors’ assets pursuant to a Sale Order. The Second Amendment... More
  • ADI Liquidation, Inc. Avoidance Actions Filed On September 7-8, 2016, various debtors in the ADI Liquidation, Inc. (f/k/a AWI Delaware, Inc.), et al. bankruptcy proceeding filed approximately 332 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 544 and/or 547, 548 and 550 of the Bankruptcy Code (depending upon the nature of the underlying transactions).  The Debtors also seek to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code. Of the 332 avoidance actions, AW Liquidation, Inc.... More
  • Chancery Utilizes Discounted Cash Flow Valuation to Appraise Privately-Held Company In a recent Court of Chancery appraisal decision, In re ISN Software Appraisal Litigation, C.A. No. 8388-VCG (Del. Ch. Aug. 11), Vice Chancellor Glasscock relied upon the discounted cash flow (DCF) valuation method to value an entity whose stock was not traded publicly, lacked historical sales of its stock that were reliable indicators of fair value, and for which no comparable company evaluations existed. The Court started its valuation analysis using the DCF framework of the expert of ISN Software Corp. because his valuation... More
  • SDNY Rules that Distribution of Liquidated Swap Agreement Collateral is Protected by the Safe Harbor in Bankruptcy Code Section 560 In the recent decision of Lehman Bros. Special Fin. Inc. v. Bank of Am. Nat’l Assoc. (In re Lehman Bros. Holdings Inc.), 2016 WL 3621180 (Bankr. S.D.N.Y. June 28, 2016),  the U.S. Bankruptcy Court for the Southern District of New York held that certain priority payment provisions in swap agreements do not constitute impermissible ipso facto provisions and that the distribution of liquidated swap agreement collateral is protected by the safe harbor in Bankruptcy Code Section 560. The case involved synthetic collateralized debt... More