About This Blog
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.
Judges and Courts
- Delaware Court of Chancery
- Delaware District Court
- Delaware Supreme Court
- Judge Brendan L. Shannon
- Judge Christopher S. Sontchi
- Judge Kevin Gross
- Judge Kevin J. Carey
- Judge Laurie Selber Silverstein
- Judge Mary F. Walrath
- Judge Peter J. Walsh
- Third Circuit Court of Appeals
- United States Supreme Court
- Post-Confirmation Purchasers of Shares Be Aware: Third Circuit Holds Shares are Subject to the Plan, Including Its Releases
- Delaware District Court Agrees That Plans Need Not Reflect Bargained For Priority Provisions in Subordination Agreements
- Liquidation Consultants Are Not “Professionals” Requiring Retention Under § 327(a) of the Bankruptcy Code
Delaware Bankruptcy Court Finds Debtor Did Not Properly Terminate Contract, Faces Significant Breach of Contract Damages
In re Outer Harbor Terminal, LLC, No. 16-10283 (LSS), 2017 WL 696676 (Bankr. D. Del. Feb. 21, 2017)
In the context of a claims objection, the Court adhered to unambiguous contract language in determining that the presence of a termination triggering event did not automatically terminate a contract, opening the door for potentially significant damages. This matter will now proceed to the damages phase, where the non-debtor contract counterparty has alleged in its proof of claim an approximate $13.3 million in, among other things, breach of contract damages.
Outer Harbor Terminal, LLC (the “Debtor”) provided stevedoring services—docking and loading/unloading… Read More
Pac Sun Class Representative Denied Permission to File Class Proof of Claim on Behalf of Priority Claimants
In re Pacific Sunwear of California, Inc., No. 16-10882 (LSS) (Bankr. D. Del. June 22, 2016 and Aug. 8, 2016)
In the first of two related Opinions, Judge Laurie Selber Silverstein granted claimant Tamaree Beeney permission to file a class proof of claim for alleged violations of California wage and hour laws under California’s Private Attorney General Act (“PAGA”), but limited her representative role to absent class members who hold non-priority general unsecured claims. In the second Opinion, the Court denied reconsideration of Her Honor’s ruling and further disallowed another claimant from representing the priority class in… Read More
Stock-Based Compensation “Fits Squarely Within” the Bankruptcy Code’s Definition of “Equity Security”
GSE Envtl., Inc. v. Sorrentino (In re GSE Envtl., Inc.), No. 16-50377 (MFW), 2016 WL 3963978 (Bankr. D. Del. July 18, 2016)
In this Opinion, Judge Walrath ruled that stock-based compensation owed to the former chief executive officer (the “Defendant”) of GSE Environmental, Inc. and GSE Holding, Inc. (the “Debtors”) under his employment agreement constitutes an “equity security”, as that term is defined under the Bankruptcy Code. See Op. at *5; 11 U.S.C. § 101(16).
Defendant’s pre-petition employment agreement provided for monthly compensation in the amount of $186,000, payable in $100,000 of cash and $86,000 of company stock. After the bankruptcy… Read More
White v. Jacobs (In re New Century TRS Holdings, Inc.), No. 13-1719-SLR, 2014 WL 4100749 (D. Del. Aug. 19, 2014)
The central question in this appeal was whether notice of a debtors’ claims bar date was constitutionally sufficient to afford unknown creditors due process.* Although publication notice of a bar date in national and local newspapers is often deemed sufficient for unknown creditors, the Delaware District Court held that, under the circumstances of this case, the notice was insufficient and vacated the Bankruptcy Court’s ruling. In so ruling, the District Court observed that “when the bar… Read More
Konar v. New Century TRS Holdings, Inc (In re New Century TRS Holdings, Inc), Adv. No. 12-50187 (KJC), 2014 WL 2198247 (Bankr. D. Del. May 23, 2014); In re New Century TRS Holdings, Inc, No. 07-10416, 2014 WL 2511339 (Bankr. D. Del. May 30, 2014) (“Cromwell”); In re New Century TRS Holdings, Inc, No. 07-10416, 2014 WL 2446823 (Bankr. D. Del. May 30, 2014) (“Russell”)
In In re New Century TRS Holdings, Inc, the Honorable Kevin J. Carey has spent significant time adjudicating pro se claimants’ late-filed proofs of claims that assert various alleged injuries relating to their respective mortgages. In fact, in… Read More
IRS Not Required to File Proof of Claim for Certain Taxes Arising From Employee Wages Earned Pre-petition But Paid Post-petition
In re Goody’s LLC, No. 09-10124 (CSS) (Bankr. D. Del. May 13, 2014)
A recent Opinion issued by Judge Sontchi analyzed a motion filed by the debtors in In re Goody’s LLC to enforce plan injunctions and determine liability for certain employment taxes. The issue in Goody’scentered on the post-petition payment of allowed pre-petition wage claims. The debtors withheld employment taxes (the “Withheld Amounts”) from the wage payments, filed requisite tax returns, deposited the Withheld Amounts with the Internal Revenue Service (the “IRS”), and requested the IRS to apply the Withheld Amounts to the employees’ federal income and Social… Read More
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
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
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
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