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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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Recent Posts
- Getting Noticed in the Digital Age: Delaware Bankruptcy Court Finds Email Notice Satisfies Due Process but Not Rule 2002
- Third Circuit Reversal Paves the Way For NextEra to Potentially Recover Administrative Expenses Incurred in Connection With Failed Merger
- 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
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Third Circuit Holds That Layoffs Must Be Probable (Not Just Possible) for WARN Act Liability
Varela v. AE Liquidation, Inc. (f/k/a Eclipse Aviation Corp.) (In re AE Liquidation, Inc.), No. 16-2203, 2017 WL 3319963 (3d Cir. Aug. 4, 2017)
As we have discussed prior, under the Worker Adjustment and Retraining Notification (WARN) Act, employers may be liable if they do not give fair warning to their employees before a mass layoff. Liability can be avoided if, among other things, the “mass layoff is caused by business circumstances that were not reasonably foreseeable at the time that notice would have been required.” 20 C.F.R. § 2102(b)(2)(A). The question for the Third Circuit Court of Appeals… Read More
Delaware Bankruptcy Court Refuses to Enforce an Employee Arbitration Agreement with a Class Action Waiver Despite Its Opt-out Provision
Chan v. Fresh & Easy, LLC (In Fresh & Easy, LLC), No. 15-51897 (BLS), 2016 WL 5922292 (Bankr. D. Del. Oct. 11, 2016)
In this motion to compel arbitration Opinion, the Bankruptcy Court for the District of Delaware ruled on two issues of first impression in Delaware: (i) whether a class action waiver provision in an arbitration agreement violates the National Labor Relations Act (the “NLRA”); and if so, (ii) whether the agreement remains enforceable if it allows an employee to opt-out. The Court found that the class action waiver was unenforceable because it violated the NLRA. The… Read More
Amid Unforeseeable Failed Sale, Debtor Gave Employees Enough WARNing For Layoffs
Varela v. Eclipse Aviation Corp. (In re AE Liquidation, Inc.), Adv. No. 09-50265 (MFW), 2014 WL 6460805 (Bankr. D. Del. Nov. 18, 2014)
Eclipse Aviation Corporation (“Eclipse”) engineered, manufactured, and sold jet aircrafts. In 2008, Eclipse defaulted on its secured notes. Its board of directors contemplated liquidation, but eventually decided on a sale as a going-concern through Bankruptcy Code section 363 to Eclipse’s largest shareholder, European Technology and Investment Research Center (“ETIRC”). ETIRC funded the Eclipse bankruptcy with $20 million in debtor-in-possession financing. ETIRC later emerged as the stalking horse bidder, financed through a Russian state-owned bank. On January 23,… 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
WARN Act Claims Dismissed, But Court Grants Leave to Amend
Czarniak v. Entm’t Publ’n LLC (In re Entm’t Publ’n LLC), Adv. No. 13-50912 (CSS) (Bankr. D. Del. Mar. 12, 2014)
On March 12, 2014, the Bankruptcy Court issued an Opinion dismissing a class action lawsuit under the Federal Worker Adjustment Retraining Notification Act (the “WARN Act“) against certain affiliated non-debtors under the “single employer” theory. However, pursuant to Third Circuit case law, the Court provided the Plaintiff with leave to amend her complaint.
When a company lays off its employees suddenly and without sufficient notice, as may be the case with companies headed for bankruptcy, the WARN… Read More