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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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Karen B. Skomorucha Owens, Esq.
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Showing posts in Delaware District Court

Who Has Standing to Raise a Potential Conflict of Interest and an Objection to a Firm’s Retention?

Hofmeister v. Official Comm. of Unsecured Creditors (In re Revstone Indus., LLC), No. 13-565 (SLR), 2015 WL 5618890 (D. Del. Sept. 24, 2015)

In this Delaware District Court Memorandum affirming the decision of the Delaware Bankruptcy Court to permit the retention of counsel (“Committee Counsel”) to the Revstone debtors’ official committee of unsecured creditors (the “Committee”), the Court addressed who may object to a retention application and press an asserted conflict of interest.  In Hofmeister, Mr. Hofmeister, former founder and insider of Revstone, objected to the retention of Committee Counsel, asserting that counsel had a conflict of interest because it… Read More

District Court Denies Motion To Withdraw the Reference In Nortel, May Consider Renewed Motion At A Later Time

SNMP Research Int’l, Inc. v. Nortel Networks, Inc. (In re Nortel Networks, Inc.), No. 15-449 (LPS), 2015 WL 5275966 (D. Del. Sept. 9, 2015)

Chief Judge Stark of the District Court of Delaware recently denied a motion to withdraw the reference of an adversary proceeding in the cross-border bankruptcy case of In re Nortel Networks, Inc.  The Court held that due to the infancy of the proceeding and the Bankruptcy Court’s familiarity with the issues, the Bankruptcy Court would be better suited to preside over the proceeding until, if ever, a jury trial becomes necessary.

SNMP Research Int’l Inc. (“SNMP”), a creditor… Read More

District Court Affirms Bankruptcy Court Decision on Ordinary Course of Business and Remands Subsequent New Value and Prejudgment Interest Rulings for Further Findings

Prudential Real Estate v. Burtch (In re AE Liquidation, Inc.), Civ. Nos. 13-1504 & 13-1505 (LPS), 2015 WL 5301553 (D. Del. Sept. 10, 2015), aff’g in part, rev’g in part Burtch v. Prudential Real Estate (In re AE Liquidation, Inc.), Nos. 08-13031 & 10-55543 (MFW), 2013 WL 3778141 (Bankr. D. Del. July 17, 2013)

In this appeal and cross appeal to the Delaware District Court, Judge Leonard P. Stark affirmed a Bankruptcy Court ruling that payments made an average of 17 days faster during the preference period were not eligible for the ordinary course of business defense under section 547(c)(2)… Read More

District Court Finds a Series of Agreements to be One – Reverses and Remands to Bankruptcy Court

Huron Consulting Servs., LLC v. Physiotherapy Holdings, Inc. (In re Physiotherapy Holdings, Inc.), No. 14-693 (LPS), 2015 WL 4205146 (D. Del. July 13, 2015)

In the spring of 2014, the Delaware Bankruptcy Court was presented with a contested assumption dispute involving six agreements between Physiotherapy Holdings Inc. and its various affiliates (together, the “Debtors”) and Huron Consulting Services, LLC (“Huron”).  While the Debtors sought to assume just one – a Licensing Agreement necessary to ongoing operations – Huron argued that all six agreements were integrated and must be assumed together or not at all.  For reasons discussed in our previous Read More

Delaware District Court Transfers Declaratory Relief Action Based on the Anticipatory Filing Exception to the First Filing Rule

Flintkote Co. v. Aviva P.L.C., No. 13-103-LPS, 2015 WL 1405922 (D. Del. Mar. 25, 2015)

This Memorandum Opinion stems from a Third Circuit reversal of a Delaware District Court ruling that granted a motion to compel arbitration and dismissed as moot a motion to dismiss or, in the alternative, to transfer filed by Defendant Aviva P.L.C. (“Aviva”).  Because the Third Circuit vacated the Order denying the motion to transfer as moot, Aviva renewed its motion.  Such renewed motion is the subject of this Memorandum Opinion.  In granting the relief requested, Chief Judge Stark ruled that the anticipatory filing exception… Read More

A Simple Example: Withdrawal Of The Reference Denied By Delaware District Court Despite Federal RICO Claim

Barry v. Santander Bank, N.A. (In re Liberty State Benefits of Delaware Inc.), Civ. No. 14-677-LPS (D. Del. Mar. 12, 2015)

On March 12, 2015, Chief Judge Stark of Delaware’s District Court denied the request of defendant Santander Bank, N.A. (the “Defendant”) to withdraw the reference, rejecting Defendant’s arguments for mandatory and permissive withdrawal.  Richard Barry, the chapter 11 trustee of the debtor (the “Plaintiff”), alleged in the complaint almost entirely non-bankruptcy causes of action, including violations of the federal Racketeering Influenced and Corrupt Organization Act (“RICO”)—the sole basis for the Defendant’s mandatory withdrawal request.  Ultimately, the Court found,… Read More

EFH Debtors’ First Lien Settlement and Related Tender Offer Upheld by District Court

Delaware Trust Co. v. Energy Future Immediate Holdings, LLC (In re Energy Future Holding Corp.), No. 14-723 (RGA) (D. Del. Feb. 19, 2015)

Energy Future Holding Corporation and its subsidiaries (the “Debtors”) commenced their chapter 11 proceedings with a series of settlements (together, the “Global Settlement”) reached with certain key creditor constituencies.  Although the Global Settlement was later withdrawn in large part, the Debtors sought and obtained Bankruptcy Court approval of their settlement (“First Lien Settlement”) reached with the $4 billion first lien noteholders of debtor Energy Future Intermediate Holdings, LLC.  Pursuant to the First Lien Settlement,… Read More

Practice Point: District Court Weighs in on Submission of Orders Under Certification of Counsel

Burtch v. Avnet, Inc., No. 13-060-LPS, 2015 WL 24318  (D. Del. Jan. 16, 2015)

This District Court Memorandum Order offers a cautionary tale to practitioners as to the proper—and often improper—use of certifications of counsel.

Avnet, Inc. (“Avnet”) filed a motion to enforce a stipulation whereby the Debtors would segregate Avnet’s purchase-money collateral in a sale of assets to Laurus Master, Ltd. (“Laurus”).  A Notice of Agenda of Matters was circulated two days before a scheduled hearing, indicating that the enforcement motion was the only contested matter going forward but Avnet, Laurus and the Debtors were actively attempting to resolve… Read More

With High Bar For WARN Act’s “Single Employer” Standard, Delaware District Court Affirms Summary Judgment

Czyzewski v. Sun Capital Partners, Inc. (In re Jevic Holding Corp.), No. 13-1127-SLR (D. Del. Sept. 29, 2014)

In this Memorandum, arising from the bankruptcy proceedings of Jevic Holding Corp. and its affiliates (together, the “Debtors”), Delaware’s District Court affirmed the Bankruptcy Court’s holding that appellee Sun Capital Partners, Inc. (“Appellee”) was not a “single employer” with debtor Jevic Transportation Inc. (“Jevic”) for purposes of claims asserted under the federal and New Jersey Worker Adjustment… Read More

Plaintiff Successfully Obtains Venue Transfer Given Change in Circumstances; District Court Sua Sponte Transfers Venue of Related Cases

Zazzali v. Wavetronix LLC (In re DBSI, Inc.), No. 12-cv-1211 (GMS), et al. (D. Del. Sept. 25, 2014)

This Memorandum Opinion issued by Judge Sleet of the Delaware District Court relates to multiple bankruptcy and securities proceedings pending in Delaware stemming from the alleged Ponzi scheme perpetrated by directors of the DBSI entities.  The bankruptcy actions (collectively, the “Bankruptcy Cases”) at issue are: (i) a declaratory action commenced by several parties, including Wavetronix LLC, (collectively, the “Moving Parties”) related to investments, promissory notes and membership interests in or made by a DBSI debtor; and (ii) an adversary proceeding commenced by… Read More