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

  • Walrath Opinion on Avoidance Actions – Motion for Summary Judgment: Denied In a 24 page decision released April 13, 2017, Judge Walrath of the Delaware Bankruptcy Court denied a motion for summary judgment in a preference action brought by Charles Stanziale as the chapter 7 Trustee of Powerwave Technologies against Superiour Technical Resources – Adversary Proceeding Case No. 15-50085.  Judge Walrath’s opinion is available here (the “Opinion”).  Judge Walrath held that “genuine factual disputes precluding summary judgment”.  Opinion at *6.  While we have summarized a large number of opinions on preference actions,... More
  • DE Bankruptcy Court Dismisses Preference Complaint Against Former Insider in Part with Prejudice Not uncommonly, a preference complaint fails to adequately allege that the transfers sought to be recovered by the trustee were made “for or on account of an antecedent debt owed by the debtor before such transfer was made”, as required under Section 547(b) of the Bankruptcy Code. Thus, when faced with a complaint to recover alleged preferential transfers, a defendant can proceed in one of two ways: (i) file an answer and raise affirmative defenses, or (ii) move to dismiss under... More
  • Affirmative Insurance – Dueling Motions to Dismiss, Denied In a 33 page decision released March 29, 2017, Judge Sontchi of the Delaware Bankruptcy Court ruled on competing motions to dismiss the remaining claims and counterclaims in an adversary proceeding in the Affirmative Insurance bankruptcy – Adversary Proceeding Case No. 16-50425.  Judge Sontchi’s opinion is available here (the “Opinion”).  As Judge Sontchi stated in the Opinion, the issue was a simple one, Opinion at *3, there is a dispute of a material fact between the parties, and dismissal is therefor inappropriate.... More
  • Carve-out Provision in DIP Financing Order Did Not Limit Fees to Committee Counsel In the recent decision of In re Molycorp, Inc., 562 B.R. 67 (Bankr. D. Del. 2017), Judge Sontchi held that a carve-out provision in a DIP financing order did not act as an absolute limit on the fees and expenses payable to counsel to the creditors committee in a case with a confirmed chapter 11 plan. The DIP financing order contained a 250K carve-out for committee fees incurred in investigating claims against the lender.  After its investigation, the committee filed a motion seeking standing to pursue... More
  • RadioShack – Bankruptcy Round Two Serving as an illustration of the principal that a financial restructuring won’t save a business that has ceased to be frequented by customers, RadioShack has filed for bankruptcy for the second time in as many years.  The prior case was filed in the Bankruptcy Court for the District of Delaware as case no. 15-10197.  This case is also in the Bankruptcy Court for the District of Delaware, and is case no. 17-10506.  Prime Clerk is the noticing agent in both cases... More
  • Cal Dive Offshore Contractors, Inc. Preference Actions Filed On March 2, 2017, Cal Dive Offshore Contractors, Inc. (“Cal Dive” or “Debtor”) filed approximately 136 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. Cal Dive and its affiliated debtors filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on March 3, 2015 under Chapter 11 of the Bankruptcy Code.  According to each complaint, Cal Dive “constituted a global marine contractor that provided highly... More
  • Money Center Opinion – The Multiple Sovereigns in the United States and Bankruptcy On February 28, 2017, Judge Sontchi of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Money Center of America  bankruptcy – Bankr. D. Del., Case 14-10603.  The Opinion is available here.  This Opinion decided two separate, but similar, motions to dismiss filed by 2 entities owned by federally recognized Indian Tribes and sovereign nations (the “Tribes”).  Each of these Tribes owned a casino (through wholly owned entities) in which the Debtor placed ATMs and other cash advance services,... More
  • Contract Rejection – As Interpreted in Outer Harbor Terminal’s Bankruptcy On February 21, 2017, Judge Silverstein of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Outer Harbor Terminal bankruptcy proceeding – Bankr. D. Del., Case 16-10283.  The Opinion is available here.  This Opinion decided the Debtor’s objection to a claim for breach of contract filed by Kawasaki Kisen Kaisha, Ltd. (“K Line”).  The claim objection objected both to the amount of the K Line claim, and to the very existence of the K Line claim.  The Opinion only... More
  • Delaware Bankruptcy Court Issues 2017 Local Rule Amendments Earlier this month, the U.S. Bankruptcy Court for the District of Delaware (the “Delaware Bankruptcy Court”) released an update to the Local Rules for the United States Bankruptcy Court District of Delaware (Effective February 1, 2017) (the “Local Rules”).  According to Local Rule 1001-1(e), the 2017 version of the Local Rules governs all cases or proceedings filed after February 1, 2017, and also applies to proceedings pending on the effective date, except to the extent that the Court finds that it... More
  • S.D.N.Y. Bankruptcy Court Dismisses Preference Action Involving International Transfer In the recent decision of Spizz v. Goldfarb Seligman & Co. (In re Ampal-American Israel Corp.), 2017 WL 75750 (Bankr. S.D.N.Y. Jan. 9, 2017), the United States Bankruptcy Court for the Southern District of New York dismissed a preference complaint filed by a trustee of chapter 7 debtor headquartered in Israel, where the payment was made from the debtor’s Israeli bank to an Israeli supplier.  The Court held that Section 547 of the Bankruptcy Code does not have extraterritorial effect and the transfer did... More