Delaware Bankruptcy Litigation Blog

The Delaware Bankruptcy Litigation blog offers insight and updates on corporate bankruptcy proceedings in Delaware and throughout the United States.

Recent Blog Posts

  • Fallbrook Technologies: Gears to Spheres…with a Bankruptcy Detour On her The Bottom Line 11 blog, Fox partner Mette Kurth discussed the recent bankruptcy filing of mechanical systems startup Fallbrook Technologies: Texas-based Fallbrook Technologies has filed for chapter 11 protection. The committee formation meeting will take place on March 9, 2018 at 10:00 a.m. in Wilmington, Delaware. The formation notice is available here. World Domination, One Gear At a Time Fallbrook develops and manufactures the NuVinci continuously variable transmission systems. What is that, you ask? It makes stuff more efficient. So the company’s mission can be summed... More
  • HCR ManorCare Files Prepackaged Chapter 11 Petition On her The Bottom Line 11 blog, Fox partner Mette Kurth discussed the recent bankruptcy filing of health care provider HCR ManorCare: Copyright: bbourdages / 123RF Stock Photo HCR ManorCare, Inc. commenced a chapter 11 bankruptcy case on March 4, 2018. It accompanied the filing with a “prepackaged” chapter 11 plan. The company has requested a hearing to approve that plan on April 12, 2018. The debtor, through its operating subsidiaries, is a Toledo-based provider of short-term, post-hospital services and long-term care. Its operating subsidiaries... More
  • Filing Alert: #Tops Supermarket Files for Bankruptcy On her The Bottom Line 11 blog, Fox partner Mette Kurth discussed the recent bankruptcy filing of regional supermarket chain Tops Markets: Regional grocery chains continue to struggle as Supermarket chain Tops Markets filed for bankruptcy protection in Manhattan yesterday. (Is the re-pocalypse heading for your local grocer?  Learn more here.) The Company Tops operates 169 full-service supermarkets, 168 under the Tops trade name and one under Orchard Fresh. And franchisees operate five more. The markets are focused on key regions in upstate New York, Northern... More
  • Only the Financially Distressed May File for Bankruptcy On February 13, 2018, Judge Silverstein of the Delaware Bankruptcy Court granted a motion to dismiss the Rent-A-Wreck of America bankruptcy case (Bankr. D. Del. case 17-11592). Judge Silverstein’s opinion is available here (the “Opinion”). In summarizing her holding, Judge Silverstein provides: These privately-owned debtors are not in financial distress (or at least they have not proven they are), and they seek to use 11 U.S.C. § 365 to redistribute value from a long-time adversary to enrich their ultimate shareholder.  The one entity that may... More
  • Preference Actions filed in Hancock Fabrics On January 31, 2018, Hancock Fabrics Inc., the post-effective date debtor, filed approximately 68 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. The Debtors filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on February 2, 2016 under Chapter 11 of the Bankruptcy Code.  On June 20, 2017, the Court entered an order confirming the Debtors’ Second Amended Joint Chapter 11... More
  • Haggen’s Order Holds: Fiduciaries who enter into “foolish” transactions but who are acting in good faith are protected On January 22, 2018, in an adversary proceeding arising within the Haggen bankruptcy (Adv. No. 16-51204), Judge Gross of the Delaware Bankruptcy Court issued a ruling against the Plaintiff, denying the relief requested in the complaint and dismissing the adversary proceeding. Judge Gross’s opinion is available here (the “Opinion”). The Committee filed an adversary proceeding with a 78 count, 145 page Complaint making numerous allegations including, but not limited to, fraudulent transfers, breach of fiduciary duties, and unjust enrichment.  The Defendants’ answer spanned 184 pages,... More
  • Cornyn and Warren Introduce the Bankruptcy Venue Reform Act of 2017 On her The Bottom Line 11 blog, Fox partner Mette Kurth examined new bankruptcy venue reform legislation recently unveiled in the U.S. Congress: Earlier today, Senators John Cornyn (R-TX) and Elizabeth Warren (D-MA) introduced the Bankruptcy Venue Reform Act of 2017. The bill would require companies to seek bankruptcy protection where they are physically headquartered. And it would simultaneously prohibit them from filing where they are incorporated or where an affiliate has a pending case. The end result? The bill would effectively limit access... More
  • Life Insurance Investment Company Files for Bankruptcy in Delaware On December 29, 2017, Life Settlement Absolute Return I, LLC (“LSAR”), along with Senior LS Holdings, LLC (“Senior LS”; collectively with LSAR, the “Debtors”), filed petitions for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case Nos. 17-13030 and 17-13031). According to the Declaration in Support of the First Day Motions of Robert J. Davey, III (“Davey Declaration”), LSAR was formed as a special purpose vehicle to invest in life insurance policies in the life settlement market. LSAR has comprehensive... More
  • Mette Kurth: The CLLA Sets Its Sights on Bankruptcy Venue Rules… Again On her The Bottom Line 11 blog, Fox partner Mette Kurth notes an expected imminent push in the U.S. Congress for bankruptcy venue reform: I have barely unpacked my suitcases, and yesterday the Commercial Law League of America (CLLA) announced that a bankruptcy venue reform bill will be proposed this week in the U.S. Senate. The bill will to seek to change the venue rules for filing Chapter 11 business cases. If you want to view the CLAA’s press release, it is available here.... More
  • Mette Kurth: 2nd Circuit Reverses Course on Cramdown Interest Rates On her The Bottom Line 11 blog, Fox partner Mette Kurth examined a recent U.S. Court of Appeals for the Second Circuit decision in In re MPM Silicones (the Momentive case). The court followed the lead of the Sixth Circuit in establishing a two-step approach to setting the cramdown interest rate on debtor payments for secured claims: Copyright: bbourdages / 123RF Stock Photo A simple proposition—that secured lenders are entitled to receive payments with a present value at least equal to the amount of their claim—has... More