Delaware Bankruptcy Litigation Blog

https://delawarebankruptcy.foxrothschild.com/

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

Recent Blog Posts

  • 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
  • Gross Opinion Calls New Value “A Beacon of Light” In a 32 page opinion entered December 5, 2017 Judge Gross of the Delaware Bankruptcy Court ruled on cross motions for summary judgment concerning an avoidance action in the Simplexity bankruptcy. Judge Gross’s opinion is available here (the “Opinion”).  This Opinion arises from a complaint brought by Charles A. Stanziale, Jr., as the Chapter 7 Trustee of Simplexity, LLC against the Sprint Corporation alleging that payments made by the debtor to Sprint of $3,842,951.86 were avoidable transfers.  Two issues were the subject of the... More
  • Real Industry Inc. Files for Chapter 11 Bankruptcy Relief in Delaware On November 17, 2017, Real Industry, Inc., along with its subsidiaries and affiliates (collectively the “Debtors” or “Real Industry”), filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 17-12464). According to the Declaration in Support of First Day Motions of Michael J. Hobey, liquidity issues and certain singular negative events have led to Real Industry’s bankruptcy filing. The Debtors operate an aluminum recycling and alloy production company based in Beachwood, Ohio. Contemporaneously, Real Alloy... More
  • No 2004 Discovery Allowed When There is a Pending Proceeding In a short opinion entered November 14, 2017 Judge Gross of the Delaware Bankruptcy Court denied a motion of an interested party to “Attend and Participate in the Rule 2004 Examinations to be Conducted by the Trustee”. Judge Gross’s opinion is available here (the “Opinion”). This is a very short Opinion and resolves a very straight-forward issue.  Can a party in separate litigation take advantage of Bankruptcy Rule 2004 to obtain discovery from the opposing party? The answer: No. Citing multiple cases, Judge Gross explains that the “pending proceeding... More
  • Amending Complaints 101 by Judge Gross – Physiotherapy Holdings In a 10-page decision signed November 6, 2017 in an adversary proceeding arising within the Physiotherapy Holdings bankruptcy (PAH Litigation Trust, case 15-51238), Judge Gross of the Delaware Bankruptcy Court denied a motion of the Litigation Trust (the “Trust”) to file an amended complaint, providing guidance on a number of different issues. Judge Gross’s opinion is available here (the “Opinion”). The Defendants opposing the motion to amend had an uphill battle in this issue.  Judge Gross begins his discussion by stating, “Motions for leave to... More
  • Digital Audio Files of the Delaware Bankruptcy Court Available Over the Internet Effective November 6, 2017, the U.S. Bankruptcy Court for the District of Delaware will start making audio recordings of certain proceedings available to the public through PACER, as well as the standard ECF notifications received by counsel.  The recordings themselves will be an attachment to a PDF document, and will be in MP3 format. Initially it will only be for proceedings before Judge Kevin J. Carey, although it may expand to other Judges in the future.  Click here for the notification posted... More
  • Liquidation Trustee’s Suit Against D&Os Falls Within Insured vs. Insured Exclusion In the recent decision of Indian Harbor Ins. Co. v. Zucker, 860 F.3d 373 (6th Cir. 2017), the Sixth Circuit Court of Appeals held that a liquidation trustee’s suit against the debtor’s former directors and officers (D&Os) falls within the “insured-versus-insured” exclusion in the debtor’s liability insurance policy. The liquidation trustee sued the D&Os for $18.8 million, alleging breach of fiduciary duties.  The insurance company filed a suit for a declaratory judgment that it had no obligation to cover any damages from... More