Blogs

Delaware Bankruptcy Update

The Delaware Bankruptcy Update blog offers insight and updates on corporate bankruptcy proceedings in Delaware.
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Bankruptcy Litigation Briefing

Authored by attorneys in Fox’s Bankruptcy Litigation group, the blog will provide analysis of the strategies adopted by litigators and the lessons to be drawn from court rulings in the most important bankruptcy litigation matters nationwide.
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Recent Blog Posts

  • Sixth Circuit BAP: Order Denying Motion to Dismiss a Bankruptcy Case is Not a Final Order The Bankruptcy Appellate Panel of the Sixth Circuit recently held that a post-confirmation motion to dismiss a bankruptcy case is not a final order that is immediately appealable. In this case, the appellants filed a judgment lien against debtor, who subsequently filed for Chapter 13 bankruptcy. Debtor sought to avoid the judgment lien, and appellants filed an objection to the confirmation plan. Appellants and debtor resolved the majority of appellants’ objections. The court confirmed the debtor’s plan, and appellants did not... More
  • Cert Granted in TM Bankruptcy Case As I previously blogged about, there is a circuit split as to whether, when a trademark owner/licensor files for bankruptcy, the licensee of the trademark can legally continue use of the mark or whether the trademark owner/licensor can reject its obligations under the licensing agreement and effectively prohibit the licensee’s continued use of the mark.  A case arising from the First Circuit, Mission Product Holdings, Inc. v. Tempnology, LLC N/K/A Old Cold LLC, involves this precise question and has made its way to... More
  • Mattress Firm Files Chapter 11 Bankruptcy in Delaware – Commercial Landlords Take Notice Earlier this month, Mattress Firm, Inc., and its affiliated debtors (collectively, “Mattress Firm”) filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.  Through the bankruptcy, Mattress Firm expects to complete a prepackaged restructuring within 45 to 60 days. Commercial landlords need to pay close attention to this bankruptcy.  Mattress Firm has already filed court motions for approval to reject up to 700 leases and will begin to close roughly 200 stores in the next few... More
  • Northern District of Texas Holds EEOC Title VII Enforcement Action Falls Within Exception to the Automatic Stay In a recent opinion, the U.S. District Court for the Northern District of Texas held that an Equal Employment Opportunity Commission (“EEOC”) action brought against an employer for alleged violations of Title VII of the Civil Rights Act of 1964 is excepted from the automatic stay by 11 U.S.C.§ 362(b)(4) (police and regulatory power exception). The district court held that the whether the claim was excepted from the automatic stay depended upon, whether the EEOC’s primary purpose in bringing the action... More
  • “Law of the Case” Doctrine Does Not Bind Bankruptcy Court When Considering Subsequent Dispositive Motions In a recent opinion, the Bankruptcy Court for the Eastern District of New York concluded that the “law of the case” doctrine did not bind the court to its prior ruling that a trustee had adequately alleged claims against debtors for turnover, conversion, and violations of the automatic stay. In Geltzer v. Brizinova, et al., the court considered a second attempt by the debtors to obtain an order dismissing the adversary proceeding filed against them based on the new theory that... More
  • Beware of Broad Release Language in Confirmation Plan In a recent an opinion, the Delaware Bankruptcy Court enforced the broad release language in a confirmation plan to release certain entities that were never intended to be released. The debtors and the creditors’ committee engaged in hard-fought negotiations, and the committee supported confirmation of the plan in large part because the settlement trust, to be created under the plan, was to pursue post-confirmation litigation against individuals and entities related to the former owner of the debtors’ business. The plan as... More
  • Delivery Agent Preference Actions Filed in Delaware Starting on September 14, 2018, George Miller, as Chapter 7 Trustee of the DA Liquidating Corporation, f/k/a Delivery Agent, Inc., et al. (“Debtors”) filed approximately 84 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547 and 550 of the Bankruptcy Code. Delivery Agent and its affiliated debtors filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on September 15, 2016.  Delivery Agent had originally filed for Chapter 11 protection... More
  • Third Circuit: Releases Contained in Confirmed Chapter 11 Plans are Res Judicata In ruling a motion to dismiss, the Third Circuit Court of Appeals considered whether the purchaser of the Debtors’ shares post-confirmation was bound by releases contained in the plan of reorganization (the “Plan”).  A copy of the opinion is available here. The Plan included “broad releases of liability,” that protected the Debtor and its officers from claims related to or arising out of the bankruptcy, with exceptions for gross negligence and willful misconduct.  Id. at 4.  After creditors had been paid in... More
  • Comment Period for Delaware Bankruptcy Court Local Rules About to Begin The U.S. Bankruptcy Court for the District of Delaware is about to begin its annual process to review and consider comments to its local rules. The comment period will continue from October 1 through October 31, 2018.  Here is a link to the instructions from the Court on how to provide comments, should you have any.  And, here is a link to the current version of the Local Rules.  ... More
  • Alert: Liquidation Trustee Awarded $17 Million Against Former CEO and Others In a suit by the trustee of the liquidation trust of Green Field Energy Services, a defunct oil services business, against the debtor’s former CEO and others, the U.S. Bankruptcy Court for the District of Delaware found that the trustee can recover almost $17 million.  See Halperin v. Moreno, et al. (In re Green Field Energy Services, Inc.), Bankr. D. Del. Adv. No. 15-50262(KG), D.I. 535. In a 126-page decision, Judge Kevin Gross found that the former CEO had caused entities he controlled... More
  • Trustee of Duane Martin and Tisha Martin Campbell’s Chapter 7 Case Brings Suit to Recover Property subject to Loan from Will & Jada Pinkett Smith’s Company In entertainment and bankruptcy news, the chapter 7 trustee for the bankruptcy filed by former celebrity couple Duane Daniel Martin and Tisha Martin Campbell (the “Debtors”), brought suit against Roxe, LLC (“Roxe”) and others claiming that Roxe was formed by Martin and his brother (also a defendant to this suit) to conceal Martin’s ownership of valuable real estate in Chatsworth, California.  See Gottlieb v. Roxe, LLC, et al. (In re Martin, et al.), Bankr. C.D. Cal. Adv. No. 18-ap-01106, Docket No. 1. ... More
  • Bankruptcy Court Grants Motion To Dismiss Based Upon Affirmative Defense Michael Temin writes: When deciding a motion to dismiss a complaint pursuant to Federal R. Bankr. 7008, which incorporates Rule 12(b)(6), a court must accept all factual allegations in the complaint as true and construe all inferences from those allegations in favor of a plaintiff.  It was, therefore, unusual when a Michigan bankruptcy court dismissed a complaint alleging breach of fiduciary duty against a director based upon an affirmative defense.  The case is In re Great Lakes Comnet, Inc., 586 B.R.... More
  • Fox Expands Presence in Wilmington Through Merger With Shaw Fishman Fox Rothschild is pleased to announce that, effective June 11, it will merge with Shaw Fishman Glantz & Towbin LLC, a 23-attorney firm with robust practices in bankruptcy, commercial litigation and real estate. The merger with the Chicago-based firm will also deepen Fox’s capabilities in Wilmington, with the addition of counsel Johnna Darby and partner Tom Horan. Johnna Darby represents businesses of various sizes and in various contexts, including formation guidance, contract review, corporate governance and business and commercial disputes pending... More
  • Bertucci’s: Filing Alert & Committee Formation Meeting Notice On her The Bottom Line 11 blog, Fox partner Mette Kurth discussed the recent bankruptcy filing of Italian restaurant chain owner and operator Bertucci’s Corporation: Company Overview Bertucci’s  was formerly known as NE Restaurant Company, Inc.  It changed its name to Bertucci’s Corporation in August 2001. Founded in 1981, the company is based in Northborough, MA.  Today Bertucci’s owns and operates a chain of 59 casual dining Italian restaurants in the Northeast and Mid-Atlantic. A Bankruptcy Sale The filing sets up a process to sell the... More
  • VER Technologies Files for Chapter 11 Bankruptcy Protection On April 5, 2018, VER Technologies Holdco LLC, along with eight subsidiaries and affiliates (collectively, “VER”), filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (Case No. 18-10834). VER, based in Glendale, CA, is an engineering and equipment company that, among other things, lit the red carpet for the Academy Awards show.  VER filed for bankruptcy after negotiating a proposed restructuring deal with creditors. The Debtors listed $1 billion... More