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
- 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
- “Straddling the Line”: Delaware Bankruptcy Court Rules That Not All Tax Liabilities Incurred During a Debtor’s Petition Year are Eligible for Administrative Expense Priority
- Insider’s Scoop: Judge Silverstein Imposes Heightened Standard Regarding Appointment of Future Claims Representative
“Straddling the Line”: Delaware Bankruptcy Court Rules That Not All Tax Liabilities Incurred During a Debtor’s Petition Year are Eligible for Administrative Expense Priority
In this Opinion, Chief Judge Sontchi ruled that tax liabilities incurred by a corporation during a year that “straddles” the petition date should be bifurcated, such that tax liabilities stemming from post-petition events are afforded administrative expense priority, whereas tax liabilities stemming from pre-petition events are afforded general unsecured status. In so doing, his Honor departed from the previous practice of affording administrative expense priority to tax liabilities incurred by a corporate debtor during the year of its petition date in… Read More
Casino Caribbean, LLC v. Money Ctrs. of Am., Inc. (In re Money Ctrs. of Am., Inc.), Adv. Nos. 14-50437 (CSS), 16-50410 (CSS), 2017 WL 775780 (Bankr. D. Del. Feb. 28, 2017)
In this Opinion, the Delaware Bankruptcy Court addressed for the first time whether tribal sovereign immunity bars preference actions against casinos operated by (or on behalf of) Indian tribes. After considering split authority from other jurisdictions, the Court ruled that it does, although the right to use preference liability defensively in support of a recoupment claim may still be preserved.
The facts underlying the Opinion concern preference claims brought… Read More
In re Irish Bank Resolution Corp. (In Special Liquidation), 559 B.R. 627 (Bankr. D. Del. 2016)
Late last year, the foreign representatives (the “Foreign Representatives”) of chapter 15 debtor Irish Bank Resolution Corporation Limited (“IBRC”) were forced to get creative after their more traditional efforts to obtain discovery from a Yahoo! email account failed. In connection with IBRC’s liquidation, significant international litigation is on-going related to the repayment evasion of billions in loans advanced by IBRC to companies owned or controlled by the Quinn Family. In the course of that litigation, the… Read More
In re Molycorp, Inc., No. 15-11357(CSS), 2017 WL 56703 (Bankr. D. Del. Jan. 5, 2017)
In this Opinion, Judge Sontchi found, among other things, that an unambiguous carve-out provision of a debtor-in-possession financing order (the “DIP Financing Order”) did not cap the professional fees and expenses of the Official Committee of Unsecured Creditors (the “Committee”) given that a plan of reorganization was confirmed. Moreover, because the Committee’s professional did not agree to different treatment, its fees and expenses were administrative expenses that must be paid in full.
In Molycorp, the Committee, the debtor Molycorp, Inc. (the “Debtor”), and the DIP… Read More
Insider’s Scoop: Judge Sontchi’s Decision to Confirm Horsehead’s Plan Was One of His Honor’s Most Difficult and Closest Calls in Ten Years on the Bench
In re Horsehead Holding Corp., No. 16-10287 (CSS) (Bankr. D. Del. Sept. 2, 2016)
Following a three day confirmation trial, which attracted scores of shareholders and running commentary via live tweets from the courtroom, Judge Sontchi confirmed the second amended plan of reorganization (the “Plan”) proposed by Horsehead Holding Corp. and its affiliated debtors (“Horsehead”) over the objection of the official committee of equity holders (the “Equity Committee”), holding that the Plan was proposed in good faith and satisfied the absolute priority rule. His Honor described the decision as one of the most difficult and closest calls… Read More
Practice Point: Substance Matters – Recent Rulings Confirm and Clarify Pleading Standards under Section 547
THQ, Inc. v. Starcom Worldwide, Inc. (In re THQ, Inc.), No. 14-51079 (MFW), 2016 WL 1599798 (Bankr. D. Del. Apr. 18, 2016).
Giuliano v. Haskett, (In re MCG Ltd. P’ship), No. 14-50536 (CSS), 545 B.R. 74 (Bankr. D. Del. Jan. 28, 2016).
Two recent rulings by the Delaware Bankruptcy Court confirm the well-known pleading standards that a preference complaint must do more than “merely parrot the language of section 547” to survive a motion to dismiss. The cases also clarify the type of particularized facts that must be alleged to state a claim under section 547.
In THQ, Inc. v. Starcom Worldwide, Inc…. Read More
Insider’s Scoop: Bankruptcy Court Grants Motions to Form an Official Equity Committee Due to Dramatic Adjustments to Valuation Over a Short Period of Time
In re Horsehead Corp., No. 16-10287 (Bankr. D. Del. May 2, 2016) (CSS)
In a packed courtroom, full of shareholders appearing pro se, Judge Sontchi granted motions to appoint an official equity committee. Acknowledging that he was going “out on a limb here from the standpoint on where the law puts me”, Judge Sontchi cautioned that “something doesn’t smell right to the Court.” Hr’g Tr. 100:17-19, 100:25-101:1. The Court based its ruling on His Honor’s experience and the “unusual circumstances” attendant to the Debtor’s valuation, which had… Read More
In re Samson Resources, Corp., Case No. 15-11934 (CSS) (Bankr. D. Del. Feb. 8, 2016)
The Boomerang Tube decision has already been followed by one other Delaware bankruptcy judge. In a letter ruling in In re Samson Resources Corp., Judge Christopher S. Sontchi agreed with, endorsed, and applied Judge Walrath’s… Read More
On the Eve of the EFH Confirmation Hearing, Bankruptcy Court Issues Opinion on Unsecured Noteholders’ Entitlement to Post-Petition Interest
In re Energy Future Holdings Corp., No. 14-10979, 2015 WL 6660787 (Bankr. D. Del. Oct. 30, 2015)
On the eve of the multi-week confirmation hearing scheduled in the chapter 11 cases of Energy Future Holdings Corp., Judge Sontchi of Delaware’s Bankruptcy Court issued several significant decisions, one of which—analyzed here—rules on whether unsecured creditors are entitled to receive post-petition interest on their claims under four sections of the Bankruptcy Code—section 502(b)(2), section 1129(a)(7) (“Best Interests Test”), section 1129(b) (“Cramdown”), and section 1124(1) (“Unimpairment”).* First, as a threshold matter, the Court held that an allowable portion of an unsecured claim… Read More