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

  • Judge Carey Holds that Severance Claim is a Priority Claim In an 8 page decision dated October 19, 2016, Judge Carey of the Delaware Bankruptcy Court overruled an objection to the reclassification of the claim of a terminated employee.  Judge Carey’s opinion is available here (the “Opinion”).  This employee (“Mangan”) was a fifteen year veteran of the Debtor, and was entitled to 15 weeks of severance pay upon termination.  That is not in dispute. Also admitted is that Mangan was terminated on August 1, 2014, the Debtors filed for bankruptcy on September 9, 2014, and the Debtors’ employees and representative obtained continued... More
  • Lien Stripping in Bankruptcy On October 11, 2016, Chief Judge Brendan L. Shannon of the Delaware Bankruptcy Court issued a letter ruling in which he opined on the appropriate valuation of a fist lien.  A copy of the Opinion is available here. While the ruling is short, it is important that lenders are cognizant of it.  Judge Shannon cites to a prior opinion he issued in which he held that “the operative date for valuation of residential property under § 1322(b)” is the petition date. ... 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
  • Abeinsa Holding Opinion – Motion for Relief from Stay Granted Summary In a 9 page decision dated October 6, 2016, Judge Carey of the Delaware Bankruptcy Court granted the motion of Portland General Electric (“PGE”) for relief from the automatic stay of the Bankruptcy Code.  Judge Carey’s opinion is available here (the “Opinion”).  PGE moved that the stay be lifted so that it could initiate litigation against various debtor entities arising out of alleged breaches of a construction agreement between PGE and the Debtors called the “Turnkey Engineering, Procurement & Construction Agreement for Carty Generating Station” (the “EPC... 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
  • 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
  • Opinion in NewPage (Pirinate Consulting) is a Reminder of 547 Defenses Over three years ago, in September 2013, Pirinate Consulting Group LLC, in its capacity as Litigation Trustee (the “Trustee”) of the NewPage Creditor Litigation Trust, began filing complaints in the Delaware Bankruptcy Court seeking the avoidance and recovery of what the Trustee alleges are preferential transfers.  You can read our summary of the initial preference filings here: Pirinate Consulting, Trustee in NewPage Bankruptcy, Files Preference Actions.  Judge Gross’ opinion (the “Opinion”) is a reminder of the normal defenses in a... 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
  • NJOY and Delivery Agent Formation Meetings Scheduled It isn’t only the athletic-wear retailers going through bankruptcy (Sports Authority and Golfsmith), but retailers on the other end of the athletic spectrum – think t.v. and tobacco. Delivery Agent, a company which has developed technology focused on allowing television watchers to easily purchase any items they see in a television show or advertisement, has filed for bankruptcy protection in Delaware.  Its formation meeting is scheduled for September 29, 2016 at 10:00 a.m. at the The Double Tree Hotel, 700 King Street, Salon C,... 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