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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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Judges and Courts
- Delaware Court of Chancery
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Recent Posts
- Getting Noticed in the Digital Age: Delaware Bankruptcy Court Finds Email Notice Satisfies Due Process but Not Rule 2002
- Third Circuit Reversal Paves the Way For NextEra to Potentially Recover Administrative Expenses Incurred in Connection With Failed Merger
- Delaware District Court Disagrees with Bankruptcy Court’s Ruling and Holds That Committee’s Challenge Rights Survived Entry of the Sale Order and Consummation of Sale
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Applying New York Law, Third Circuit Holds That Acceleration Clauses Do Not Negate Make-Whole Redemption Provisions Absent Clear Contractual Language
Delaware Trust Co. v. Energy Future Intermediate Holding Co. (In re Energy Future Holdings Corp.), 842 F.3d 247 (3d Cir. 2016)
Disagreeing with the United States Bankruptcy Court for the Southern District of New York, the Court of Appeals for the Third Circuit held in this Opinion that New York law requires the Energy Future debtors (“EFIH”) to pay redemption premiums (or a “make-whole”) to their first and second lien noteholders under the terms of governing indentures. In doing so, the Court reversed the district court decision affirming the Delaware Bankruptcy Court’s ruling (discussed here) that the… Read More
Delaware Bankruptcy Court Won’t Allow Automatic Stay To Be Used As Litigation “Sword”
In re Scarborough-St. James Corp., No. 15-10625, 2015 WL 4940043 (LSS) (Bankr. D. Del. Aug. 18, 2015)
In her Honor’s first published Opinion, Judge Silverstein refused to permit a debtor to use the automatic stay as an offensive litigation tactic and granted a landlord’s motion for relief of the stay so that it could proceed with an eviction proceeding against the debtor. Using the familiar three-pronged balancing test, the Court held that cause exists to allow the continued action because the debtor will not suffer great prejudice, the hardship to the landlord considerably outweighs the hardship to… Read More
Delaware Bankruptcy Court Walks “Interpretive Tightrope” Between Automatic Stay And The Norris-La Guardia Act
In re Trump Entm’t Resorts, Inc., No. 14-12103 (KG) (Bankr. D. Del. July 21, 2015)
Aligning itself with Sixth and Second Circuit law, the Delaware Bankruptcy Court ruled that activities described in, and protected by, the Norris-La Guardia Act (“NLA”) do not constitute violations of the automatic stay under Bankruptcy Code section 362. Although wrestling to reconcile the two statutes, an anti-injunction labor law on the one hand and a broad bankruptcy-based injunction statute on the other, the Bankruptcy Court relied on the uncontroverted congressional intent that the automatic stay cannot enjoin certain NLA protected activities, and instructed the… Read More
UPDATE – After Trial And Despite Likelihood Of Success On The Merits, Bankruptcy Court Holds No “Cause” To Lift Automatic Stay, Ending Make-Whole Adversary Proceeding in EFH
Delaware Trust Co. v. Energy Future Intermediate Holding Co. (In re Energy Future Holdings Corp.), Adv. Pro. No. 14-50363 (CSS), — B.R. — (Bankr. D. Del. July 8, 2015)
Previously, the Delaware Bankruptcy Court determined that an evidentiary hearing was necessary on the issue of whether “cause” exists to lift the automatic stay with respect to the make-whole dispute. For a general background of the facts and law, see our recent blog post here. Now, after a three-day trial, Judge Sontchi has held that, under the totality of the circumstances, cause does not exist to lift the… Read More
Automatic Stay Held Not Applicable to Shareholder’s Right to Compel Shareholder Meeting
In re SS Body Armor I, Inc., No. 10-11255 (CSS), 2015 WL 1523775 (Bankr. D. Del. Apr. 1, 2015)
In this Opinion, Delaware Bankruptcy Court Judge Christopher S. Sontchi adopted previous holdings of the Court of Appeals for the Second Circuit and the Delaware District Court to rule that the right of a shareholder to compel a shareholder meeting for the purpose of electing a new board of directors continues during a bankruptcy proceeding unimpaired by the automatic stay. See Manville Corp. v. Equity Sec. Holders Comm. (In re Johns-Manville Corp.), 801 F.2d 60 (2d Cir. 1986); Official Bondholder Comm…. Read More
Significant Headway Made Relating To EFH Make-Whole Dispute, But Stay Relief Motion And Make-Whole Liability Hang In The Balance
Delaware Trust Co. v. Energy Future Intermediate Holding Co. (In re Energy Future Holdings Corp.), Adv. Pro. No. 14-50363 (CSS), — B.R. — (Bankr. D. Del. Mar. 26, 2015)
On March 26, 2015, Judge Sontchi made a significant, but not entirely dispositive, ruling in the on-going make-whole litigation encompassed within the Energy Future Holdings Corp. (with its affiliates, the “Debtors”) bankruptcy proceedings. In this Opinion, Judge Sontchi granted summary judgment for the Debtors in part, ruling that (i) the bankruptcy filing caused an automatic redemption and no “Applicable Premium” or make-whole was due; (ii) the EFIH Debtors’ did… Read More
Third Circuit’s Hypothetical Test Wins The Day As Bankruptcy Court Grants Donald And Ivanka Trump Relief From The Automatic Stay
In re Trump Entm’t Resorts, Inc., No. 14-12103 (KG), WL (Bankr. D. Del. Feb. 20, 2015)
On February 20, 2015, the Honorable Kevin Gross granted relief from the automatic stay so that Donald and Ivanka Trump (the “Trumps”) may continue their action against Trump Entertainment Resorts, Inc. and certain affiliated debtors (the “Debtors”) seeking to terminate a trademark license agreement (the “Trademark License Agreement”) and remove, among other things, the “Trump” name from the Debtors’ buildings. Following Third Circuit precedent, Judge Gross ruled that under the “hypothetical test” the Trademark License Agreement could not be assumed or assigned by… Read More
Despite German Decisional and Statutory Authority, Bankruptcy Court Must Still Review Debtorʼs Professional Fees for Reasonableness
In re Solar Trust of America, LLC, No. 12-11136 (KG) (Bankr. D. Del. Jan. 12, 2015)
In this Memorandum Opinion issued by the Honorable Kevin Gross in the chapter 11 cases of Solar Trust of America, LLC (“STA”) and its affiliated debtors, the Delaware Bankruptcy Court determined that a post-petition decision of a German appellate court violated the automatic stay and thus, was void as a matter of law. Despite contrary arguments, the Court did not find the issuance of the decision ministerial—a usual exception to the automatic stay—not only because the ruling was issued by a judge but… Read More
Zero Purchase Price Repo Transactions Held to Qualify Under the Catchall Provision of Section 101(47)(A)(v); Liquidation of Disputed Securities Remanded to Bankruptcy Court for Further Review
George L. Miller, Chapter 7 Trustee for the Estate of HomeBanc Corp. v. Bear Stearns & Co., Inc. (In re HomeBanc Mortgage Corp.), No. 13-1064 (RGA) (D. Del. March 27, 2014)
In this