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

  • 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
  • Eleventh Circuit Holds “New Value” Need Not Remain Unpaid Michael Temin writes: One of the commonly asserted defenses to preference avoidance actions is the “new value” defense set forth in 11 U.S.C. § 547(c)(4).  One issue considered by courts is whether the “new value” must remain unpaid.  In a recent opinion, the Eleventh Circuit joined the Fourth, Fifth, Eighth and Ninth Circuits in holding that it does not. In Kaye v. Blue Bell Creameries, Inc., (In re BFW Liquidation, LLC), No. 17-13588, (11th Cir. Aug. 14, 2018), the Eleventh Circuit determined... More
  • 9th Circuit BAP: Debtor Lacks Standing to Appeal Order Reopening Bankruptcy Case Yesterday, the Bankruptcy Panel of the Ninth Circuit Court of Appeals issued yet another decision related to standing and rights to appeal bankruptcy court orders.  In Bray v. U.S. Bank National Association, (In re Bray), the Ninth Circuit BAP considered a chapter 7 individual debtor’s appeal from an order reopening his involuntary chapter 7 bankruptcy case.  See Bray, B.A.P. No. CC-17-1373-SKuF (9th Cir. BAP Aug. 7 2018). Our prior blog posts on similar decisions from the Ninth Circuit regarding rights and standing... More
  • For the Defense: State Courts Reject the Ponzi Scheme Presumptions in Fraudulent Transfer Actions Bruce J. Borrus writes: Bernie Madoff in New York, Tom Petters in Minneapolis, Allen Stanford in Houston, and Darren Berg in Seattle lead a rogues’ gallery of infamous Ponzi schemers.  All are now serving time in prison.  But the civil litigation arising from their Ponzi schemes and the Ponzi schemes of other less notorious fraudsters is not over.  Ponzi schemes have spawned thousands of fraudulent transfer cases.  Anglo-American fraudulent transfer law has a long history dating back four centuries to the... More
  • Fifth Circuit: Debtor Judicially Estopped for Failure to Disclose Asset In a recent opinion, the Fifth Circuit affirmed a district court ruling that found that a debtor was judicially estopped from claiming a stay violation by a mortgagee, who foreclosed on the debtor’s property, due to the debtor’s failure to disclose the affected property or his putative claims in his bankruptcy. The Fifth Circuit explained that the “doctrine of judicial estoppel is equitable in nature and can be invoked by a court to prevent a party from asserting a position in... More
  • How Bankruptcy Effects Rights Under Trademark Licenses When a trademark licensor files for bankruptcy, can the licensees of their trademarks continue using those marks, or does the licensor have the right to prohibit their continued use? On Fox’s Above the Fold blog covering advertising law, partner Elizabeth Patton recently wrote a post discussing this open question, which sits at the heart of a case that may be heard by the U.S. Supreme Court. We invite you to read Elizabeth’s post covering the case and its potential impact: How Bankruptcy... More
  • Ninth Circuit Clarifies Point Center Decision — To Preserve Right to Appeal, there Must be Evidence in the Bankruptcy Record That Appellant was Appearing, Objecting or Represented An opinion issued yesterday by the U.S. Court of Appeals for the Ninth Circuit reiterates the importance of filing written objections and appearing in the Bankruptcy Court to preserve rights to appeal.  The opinion clarifies the Ninth Circuit’s recent opinion on this issue, which we covered in a recent blog post.  In Reid and Hellyer, APC v. Laski (In re Wrightwood Guest Ranch, LLC), No. 16-56856, D.C. No. 5:16-cv-07168-MFW, the Ninth Circuit considered an appeal of an order issued by... More
  • For Fraudulent Transfer Statute of Limitations, Transfer of Real Property Occurred upon Recording of Deed, not Execution A recently issued opinion by the U. S Bankruptcy Court for the District of New Mexico provides some guidance on the relevant date for the transfer of real property for purposes of the statute of limitations applicable to fraudulent transfer claims. In Gonzales v. Sexton (In re Esquibel), Adv. No. 17-1042-j (Bankr. D.N.M. July 23, 2018) the Bankruptcy Court considered a chapter 7 trustee’s summary judgment motion regarding the trustee’s claims for avoidance and recovery of actual and constructive fraudulent transfers under... More
  • Delaware Bankruptcy Court Reinforces Use of Pacor Test to Assess Subject-Matter Jurisdiction over Chapter 7 Trustee’s Claims In Beskrone v. Int’l Educ. Corp., Adv. No. 17-50523 (CSS) (Bankr. D. Del. July 2, 2018), the Bankruptcy Court for the District of Delaware held that a chapter 7 trustee’s adversary proceeding to recover alleged prepetition accounts receivable fell under the Court’s “related to” jurisdiction. Pursuant to 28 U.S.C. §§ 1334 and 157(a), bankruptcy courts have jurisdiction over the following types of matters: cases under title 11 of the United States Code, i.e., the Bankruptcy Code; proceedings arising under title... More
  • Hawaii Bankruptcy Appeal Serves as a Reminder on Preferential Transfers In an appeal from the U.S. Bankruptcy Court for the District of Hawaii, the U.S. District Court for the District of Hawaii determined when the date of the transfer occurred for the purposes of a preferential transfer asserted by a trustee pursuant to 11 U.S.C. §547.  See Coulson v. Kane (In re Price), Civ. No. 17-00437-LEK-KSC (D. Hi June 29, 2018).  Generally, a preferential transfer under Section 547 of the Bankruptcy Code involves a transfer of the debtor’s funds or property shortly... 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
  • 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