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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 Subject Matter Jurisdiction

Stern Requires More Than Subject Matter Jurisdiction, Bankruptcy Court Must Also Have Constitutional Adjudicatory Authority to Approve Nonconsensual Third-Party Releases in a Plan

Opt-Out Lenders v. Millennium Lab Holdings II, LLC, No. 16-110-LPS, — F.Supp.3d —, 2017 WL 1032992 (D. Del. Mar. 17, 2017) corrected and superseded by 2017 WL 1064997 (D. Del. Mar. 20, 2017)

In this Opinion, the United States District Court for the District of Delaware (the “District Court”) examines the bankruptcy court’s authority post-Stern v. Marshall, 131 S. Ct. 2594 (2011), to enter a final order releasing and permanently enjoining a non-debtor’s state law fraud and federal RICO claims against non-debtors absent consent.  Following two recent United States Supreme Court cases—Stern and Wellness Int’l Network, Ltd. v…. Read More

Bankruptcy Court Finds “Close Nexus” Between Adversary Proceeding and Plan Necessary to Exercise Post-Confirmation, “Related to” Jurisdiction

Emerald Capital Advisors Corp. v. Karma Auto. LLC (In re FAH Liquidating Corp.), Adv. No. 16-51528 (KG), 2017 WL 663521 (Bankr. D. Del. Feb. 16, 2017)

In denying the motion to dismiss filed by Wanxiang Clean Energy USA LLC (“Wanxiang”) and Karma Automotive LLC (“Karma” and together with Wanxiang, “Defendants”), the Bankruptcy Court found that it has both “arising in” and “related to” jurisdiction to hear an adversary proceeding filed by the Trustee for the FAH Liquidating Trust (“Trustee”) over two years after confirmation.

A more fulsome history of the bankruptcy cases filed by Fisker Automotive Holdings, Inc. and Fisker… Read More

No “Related to” Jurisdiction Despite Stipulation and Bankruptcy Court Order Governing the Non-Debtor Parties’ Rights and Responsibilities

Seagate Tech. (US) Holdings, Inc. v. Global Kato HG, LLC (In re Solyndra, LLC), 2015 WL 6125246 (MFW) (Bankr. D. Del. Oct. 16, 2015).

In this Memorandum Opinion, Judge Mary Walrath of Delaware’s Bankruptcy Court granted a motion to dismiss an adversary proceeding between two non-debtor parties based on lack of subject matter jurisdiction, and also remanded similar litigation between the parties back to California state court.  Among other things, the Court concluded that an order issued by the Bankruptcy Court approving a stipulation did not confer subject matter jurisdiction over a proceeding between two non-debtors alleging state… 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

Pro Se Plaintiff’s Adversary Complaint Dismissed For Lack of Subject Matter Jurisdiction

Carr v. JP Morgan Chase Bank, N.A. (In re New Century TRS Holdings, Inc.), Adv. No. 13-51058 (KJC), 2014 WL 392848 (Bankr. D. Del. Feb. 3, 2014)

In this Memorandum, Judge Carey dismissed a pro se plaintiff’s adversary complaint because the plaintiff lacked standing to pursue certain claims, and the Court lacked subject matter jurisdiction to consider the remaining.  This decision serves as a reminder that every creditor or party-in-interest, regardless of their legal acumen, should seek counsel to represent them in our Court.

Here, the Court had a difficult time determining what… Read More