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Showing posts in Claims

Third Circuit Holds That Bankruptcy Code Section 502(e)(1)(B) Can Be Applied to Disallow Claims Against a Post-Confirmation Liquidation Trust

In re Caribbean Petroleum Corp., No. 13-2326, 2014 WL 1778050 (3d Cir. May 6, 2014)

On May 6, 2014, the Third Circuit affirmed the decision of the Bankruptcy Court in In re Caribbean Petroleum Corp. to grant a liquidating trustee’s motion to disallow a proof of claim pursuant to 11 U.S.C. § 502(e)(1)(B).  In doing so, the Court disregarded a challenge to the applicability of section 502(e)(1)(B) in the post-confirmation context.

Interek USA, Inc. (“Interek”) sought contribution from the Caribbean Petroleum debtors in the event that Interek was found liable in ongoing litigation related to a large explosion at the debtors’… Read More

Third Circuit Extends and Applies Broad Definition of “Claim” Beyond Common Law Tort Actions

In re Ruitenberg, 745 F.3d 647 (3d Cir. 2014)

The Honorable Thomas L. Ambro penned this short Opinion, extending the holding of JELD-WEN, Inc. v. Van Brunt (In re Grossman’s), 607 F.3d 114 (3d Cir. 2010), outside the context of tort-related claims.  In Grossman’s, the Third Circuit revisited the question of how to determine the existence of a claim.  It abandoned the earlier and narrower “accrual test” set out in In re Frenville, 744 F.2d 332 (3d Cir. 1984), which focused on when a right to payment arose as determined by governing state law, for a broader test… Read More

Mortgage Borrower’s Claim Against New Century for “Mortgage Fraud” Disallowed and Expunged

In re New Century TRS Holdings, Inc., Case No. 07-10416 (KJC) (Bankr. D. Del. Apr. 10, 2014)

On April 10, 2014, the Honorable Kevin J. Carey issued a Memorandum sustaining an objection to a proof of claim filed by a pro se mortgage borrower (the “Claimant”) in the bankruptcy proceeding of New Century Mortgage Corporation (“New Century”).  This is Judge Carey’s third opinion in recent months denying pro se borrower claims in New Century.  A joint summary of the two other opinions may be found here.

The Claimant filed proof of its claim (the… Read More

Creditors’ Proofs of Claim Denied as Untimely Filed

In re New Century TRS Holdings, Inc., No. 07-10416 (KJC) (Bankr. D. Del. Mar. 4, 2014) (“Cromwell“); In re New Century TRS Holdings, Inc., Adv. No. 11-53199 (KJC) (Bankr. D. Del. Mar. 7, 2014) (“Silva“)

On March 4, 2014, Judge Carey issued a Memorandum denying pro se creditor Cromwell’s motion for an order approving her proof of claim as timely filed.  Then on March 7, 2014, Judge Carey issued a second Memorandum in the same bankruptcy case denying a similar motion filed by pro se creditor Silva.  The Court follows a similar analysis when applying the excusable neglect standard… 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

Federal False Claims Act Proof of Claim Disallowed

In re ATLS Acquisition, LLC, No. 13-10262 (PJW), 2014 WL 490931 (Bankr. D. Del. Feb. 6, 2014)

In this lengthy 71-page Opinion, Judge Walsh tackled the reverse claims provision of the Federal False Claims Act, see 31 U.S.C. § 3729(a)(7) (2006), infrequently opined upon by, or relevant to, the Delaware Bankruptcy Court.  While the intricacies of the medical supply industry and its interconnectedness to the Federal government are interesting in their own right, the effects of this Opinion will not likely be wide reaching.

In short, former employees (the “Relators”) of Liberty Medical Supply,… Read More

No “Judgment,” No Attorney Charging Lien; Claim Reclassified

In re Pallet Company LLC, No. 13-11459 (KG) (Bankr. D. Del. Feb. 4, 2014)

In this short Memorandum Opinion, the Honorable Kevin Gross ruled that, under Michigan and Arizona state law, attorney’s charging liens attach only after a judgment is final and favorable to the client.  Therefore, the claimant, who asserted a $301,000 secured claim for prepetition legal services, was entitled only to assert a nonpriority general unsecured claim.

The Debtors hired the claimant, Perkins Coie LLP, to represent them pre- and post-petition to prosecute actions against third parties for misappropriation… Read More

Motion for Reconsideration Denied: Bankruptcy Court Correctly Interpreted Lease

In re Filene’s Basement, et al., No. 11-13511 (KJC) (Bankr. D. Del. Jan. 15, 2014)

In a previous Memorandum issued on February 19, 2013, the Honorable Kevin J. Carey found that, inter alia, an amendment to a credit agreement providing for a $10 million working capital loan secured by a leasehold mortgage constituted a “permanent mortgage” under the terms of the lease.  This ruling, contingent on the Court construing the undefined lease term “permanent mortgage,” triggered significant percentage rent under the lease from the debtor, Syms Corp. (“Syms”), to the landlord.  Syms moved for reconsideration of such decision… Read More

Claimant Not Considered an “Employee” of the Debtor, Denied Administrative Claim for Severance

In re World Health Alternatives, Inc. et al., No. 06-10166 (PJW) (Bankr. D. Del. Jan. 14, 2014)

Despite a claimant’s assertion that he was entitled to an administrative expense claim against debtor World Health Alternatives, Inc. (“World Health“) for severance, the Court found, in this short letter 11 ruling, that the evidence did not support such a claim.  The claimant relied upon an alleged verbal employment agreement with World Health as a basis for his claim.  While the claimant testified that he worked for… Read More