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The Delaware Bankruptcy Insider is a premier blog designed to bring its readers a comprehensive analysis of the latest Delaware corporate bankruptcy news and rulings.  Brought to you by Ashby & Geddes, P.A.

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Bankruptcy Court Determines Multiple Agreements are Not Integrated; Allows Debtor-Licensee to Assume License Agreement Over Objection of Licensor

In re Physiotherapy Holdings, Inc., No. 13-12965 (KG), 2014 WL 1053117 (Bankr. D. Del. March 19, 2014)

When faced with the question of whether a debtor-licensee was entitled to assume a software license agreement (the “License Agreement”) while rejecting five other agreements with the licensor, the Honorable Kevin Gross held in the affirmative, relying upon the express language of the various agreements and the necessity of the License Agreement to the debtors’ ability to successfully reorganize.

Prior to the petition date, Physiotherapy Holdings Inc. and its various affiliates (together, the “Debtors”) entered into six agreements with Huron Consulting… Read More

Debtors’ Funds Purchased in Section 363 Sale Permitted to be Disbursed to Debtors’ Administrative and Unsecured Creditors Over IRS Objections

United States v. LCI Holding Co., Inc., Nos. 13-924 (SLR), 13-1188 (SLR), 2014 WL 975145 (D. Del. March 10, 2014)

On March 10, 2014, Judge Sue L. Robinson of the District Court denied the request of the United States, on behalf of the Internal Revenue Service (the “IRS”), to stay disbursement of funds placed into escrow by a purchaser of debtor-assets intended to satisfy some but not all administrative and unsecured claims asserted against the debtors.  During the chapter 11 bankruptcy cases of LCI Holding Company, Inc. and its affiliated debtors (the “Debtors”), the Debtors’ prepetition… Read More

Third Circuit Upholds Bankruptcy Court’s Approval of 9019 Settlement – Acknowledges Court’s Bank of Knowledge Gathered Throughout a Bankruptcy Case

Mangano v. ID Liquidation One, LLC (f/k/a Indianapolis Downs, LLC), No. 13-3386, 2014 WL 6155944 (3d Cir. Feb. 19, 2014)

In this non-precedential Opinion, the Third Circuit was faced with an appeal of an order entered by the District Court, affirming a Bankruptcy Court order, pursuant to Bankruptcy Rule 9019, approving a settlement between a set of long-standing litigants – the debtors, Indianapolis Down, LLC (n/k/a ID Liquidation One, LLC) and Indiana Downs Capital Corp. (n/k/a ID Liquidation Two, Inc.) (collectively, the “Debtors”), on one hand, and Power Plan Entertainment Casino Resorts… Read More

Fisker’s Capped Credit Bidder is Denied Interlocutory Appeal and Direct Certification to the Third Circuit

Hybrid Tech Holdings, LLC v. Official Committee of Unsecured Creditors (In re Fisker Automotive Holdings, Inc.), No. 14-99 (GMS), 2014 WL 546036 (D. Del. Feb. 7, 2014); Hybrid Tech Holdings, LLC v. Official Committee of Unsecured Creditors (In re Fisker Automotive Holdings, Inc.), No. 14-99 (GMS), 2014 WL 576370 (D. Del. Feb. 12, 2014)

Chief Judge Sleet of the District Court has denied the emergency request of Hybrid Tech Holdings, LLC (“Hybrid”) for leave to appeal the Bankruptcy Court’s order capping for cause Hybrid’s credit bid as well as Hybrid’s emergency request for… Read More

District Court Certifies Estimation Appeal to the Third Circuit – Highlights Its Limited Role in Estimation Appeals

Specialty Products Holding Corp. v. Official Committee of Asbestos Personal Injury Claimants (In re Specialty Products Holding Corp.), No. 13-1244 (SLR), 2014 WL 545780 (D. Del. Feb. 7, 2014)

On February 7, 2014, Judge Sue L. Robinson of the District Court granted a motion filed by appellants, Specialty Products Holding Corp. and its affiliated debtors and debtors-in-possession, for certification of an order, which was entered by the Bankruptcy Court estimating the appellants’ liability for present and future asbestos claims asserted against the appellants’ bankruptcy estates, for immediate appeal to the Third Circuit. … Read More

Unconscionability Claim Dismissed; Fraudulent Transfer Claim Survives

Ritz Camera & Image, L.L.C. v. Canon U.S.A., Inc. (In re Ritz Camera & Image, L.L.C.), Adv. No. 12-50986 (KG) (Bankr. D. Del. Feb. 4, 2014)

This Memorandum Opinion opines on a routine motion to dismiss federal bankruptcy and state law claims asserted by a chapter 7 trustee against defendant Canon U.S.A., Inc. (“Canon“).  The adversary proceeding was commenced by the trustee following the 2012 filing and conversion of the chapter 11 proceedings commenced by electronics and camera merchandisers, Ritz Camera Centers and its affiliated debtors.  In connection with the debtors’ first… Read More

Pro Se Plaintiff’s Adversary Complaint Dismissed For Lack of Subject Matter Jurisdiction

Carr v. JP Morgan Chase Bank, N.A. (In re New Century TRS Holdings, Inc.), Adv. No. 13-51058 (KJC), 2014 WL 392848 (Bankr. D. Del. Feb. 3, 2014)

In this Memorandum, Judge Carey dismissed a pro se plaintiff’s adversary complaint because the plaintiff lacked standing to pursue certain claims, and the Court lacked subject matter jurisdiction to consider the remaining.  This decision serves as a reminder that every creditor or party-in-interest, regardless of their legal acumen, should seek counsel to represent them in our Court.

Here, the Court had a difficult time determining what… Read More

The Court Adopts The “Receipt Date” For New Value Defense

Giuliano v. Innovative Nationwide Builders, Inc. (In re Ultimate Acquisition Partners LLP), Adv. No. 11-52633 (MFW) (Bankr. D. Del. Jan. 31, 2014)

In this Memorandum Opinion, the Honorable Mary F. Walrath denied the motion for summary judgment of defendant Innovative Nationwide Builders, Inc. filed in response to the Trustee’s preference complaint because material issues of fact existed as to the defenses it asserted.  Although denial of summary judgment on preference claims is routine, in rendering its decision, the Court in Innovativeopined on an unsettled issue within the Third Circuit – namely, how… Read More

Release Provision Interpretation Aggregates Claims in Preference Action

U.S. Bank N.A. v. DHL Global Forwarding (In re Evergreen Solar, Inc.), Adv. No. 13-50486 (MFW), 2014 WL 300965 (Bankr. D. Del. Jan. 28, 2014)

In this short Memorandum Opinion, the Honorable Mary F. Walrath denied the defendant’s motion for summary judgment over preference claims.  In so holding, the Court interpreted a release provision in a settlement agreement to allow the plaintiff to aggregate alleged preferential transfers and only release them, pursuant to the agreement, if the combined amount totaled less than $60,000.

The release provision provided that “all claims for the avoidance… Read More

Personal Injury Claims Arising from Wrongful Acts of a Debtor, Asserted Against a Third Party Purchaser Under a State Law Successor Liability Theory, Held by Third Circuit to be Property of the Estate

Aaroma Holdings, LLC v. Diacetyl Plaintiffs (In re Emoral, Inc.), No. 13-1467, 2014 WL 259870 (3d Cir. Jan. 24, 2014)

On January 24, 2014, in a precedential Opinion, the Third Circuit determined that personal injury causes of action, arising from wrongful conduct of a debtor, asserted against a non-debtor third party pursuant to a “mere continuation” theory of successor liability under state law, are “generalized claims” belonging to a bankruptcy estate rather than personal claims belonging to individual creditors.

Prior to the bankruptcy filing of Emoral, Inc. (“Emoral”), Aaroma Holdings LLC… Read More