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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.
(302) 504-3725
kowens@ashbygeddes.com

Ashby & Geddes, P.A.
500 Delaware Avenue
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Wilmington, Delaware 19899-1150
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Challenge of Secured Creditors’ Liens and Claims by a Plaintiff Without Court’s Prior Blessing and Grant of Standing Survives Defendants’ Motion for Summary Judgment

AI Int’l Holdings (BVI) Ltd. v. MUFG Union Bank, N.A., et al. (In re The Weinstein Co. Holdings, LLC, et al.), No. 18-10601 (MFW), 2018 WL 6841349 (Bankr. D. Del. Dec. 20, 2018)

In this Memorandum Opinion, Judge Walrath of the Delaware Bankruptcy Court was given the rare opportunity to review and interpret language contained in the final order authorizing the Weinstein debtors (the “Debtors”) to obtain post-petition financing (the “Final DIP Order”) governing the investigation and challenge of the liens and claims of the Debtors’ prepetition lenders (the “Defendants”).  More specifically, Her Honor was tasked with… Read More

Delaware Bankruptcy Court’s Local Rules For 2019 Now Effective

The Bankruptcy Court for the District of Delaware’s Local Rules for 2019 went effective today, February 1, 2019.  A copy of the 2019 Local Rules can be found here and a redline of the 2019 Local Rules against the 2018 Local Rules can be found here.

Delaware District Court Finds Section 506(b) Does Not Limit Allowability of Unsecured Claims for Contractual Postpetition Attorneys’ Fees

Wilmington Trust Co. v. Tribune Media Co. (In re Tribune Media Co.), No. 15-0116 (RGA), 2018 WL 6167504 (D. Del. Nov. 26, 2018)

In a short Memorandum Order, the Delaware District Court reversed the Delaware Bankruptcy Court’s November 19, 2015 ruling issued in the chapter 11 cases of Tribune Media Company and its affiliated debtors disallowing an indenture trustee’s unsecured claim for postpetition attorneys’ fees arising under the express terms of the governing indenture.  As previously analyzed by the Delaware Bankruptcy Insider, the Bankruptcy Court acknowledged that the allowability under section 502(b) of the… Read More

Post-Confirmation Purchasers of Shares Be Aware:  Third Circuit Holds Shares are Subject to the Plan, Including Its Releases

Zardinovsky v. Arctic Glacier Income Fund (In re Arctic Glacier Int’l, Inc.), 901 F.3d 162 (3d Cir. 2018)

In this precedential Opinion, the Third Circuit Court of Appeals affirmed the decisions of the Delaware Bankruptcy and District courts holding that post-confirmation purchasers of shares are bound by the plan, including its releases and res judicata effect, where the purchasers had notice of the bankruptcy proceedings and the plan and where the sellers of the shares were represented in the bankruptcy proceedings.  In such a case, said the Court, purchasers are held, “like all buyers, to the terms… Read More

Delaware District Court Agrees That Plans Need Not Reflect Bargained For Priority Provisions in Subordination Agreements

Law Debenture Trust Co. et al. v. Tribune Media Co. (In re Tribune Media Co.), 587 B.R. 606 (D. Del. 2018)

In this Memorandum, the Delaware District Court upheld the decision of the Delaware Bankruptcy Court to confirm the plan of reorganization (the “Plan”) of Tribune Media Company (“Tribune”) and its debtor affiliates (collectively, the “Debtors”), despite the fact that the distributions proposed therein on account of certain claims infringed on prepetition subordination agreements.  In rendering the decision, Judge Sleet agreed with Judge Sontchi’s lower court opinion that the strict enforcement of subordination agreements, including provisions therein… Read More

Liquidation Consultants Are Not “Professionals” Requiring Retention Under § 327(a) of the Bankruptcy Code

In re Heritage Home Group LLC, No. 18-11736 (KG), 2018 WL 4684802 (Bankr. D. Del. Sept. 27, 2018) and In re Brookstone Holdings Corp., No. 18-11780 (BLS), 2018 WL 4801890 (Bankr. D. Del. Oct. 1, 2018)

Recently, in the chapter 11 cases of Heritage Home and Brookstone, the United States Trustee (“UST”) objected to the engagement of Gordon Brothers Retail Partners, LLC, Hilco Merchant Resources, LLC (together with Gordon Brothers Retail Partners, LLC, “Hilco”), and SB360 Capital Partners, LLC (“SB360” and together with Hilco, the “Consultants”) to assist the debtors with store closing sales… Read More

Third Circuit Upholds Bankruptcy Court’s Reconsideration Order Described by Dissent as “Troubling – If Not Dangerous – Precedent”

NextEra Energy, Inc. v. Elliott Associates, L.P. (In re Energy Future Holdings Corp.), No. 18-1109, 2018 WL 4354741 (3d Cir. Sept. 13, 2018), aff’g sub nom. 575 B.R. 616 (Bankr. D. Del. 2017)

In this precedential Opinion, the United States Court of Appeals for the Third Circuit (the “Third Circuit”) upheld the decision of the Delaware Bankruptcy Court reconsidering, and thereby denying, a previously approved $275 million termination fee (the “Termination Fee”) to a potential purchaser (NextEra Energy, Inc. (“NextEra”)) in the chapter 11 bankruptcy cases of Energy Future Holdings Corp. and its affiliated debtors (the “Debtors”). … Read More

Delaware District Court Affirms Confirmation Order Approving Horizontal Gift Providing Disparate Treatment to Separate Classes of General Unsecured Claims

Hargreaves v. Nuverra Envtl. Solutions, Inc. (In re Nuverra Envtl. Solutions, Inc.), No. 17-1024 (RGA), 2018 WL 3991471 (D. Del. Aug. 21, 2018)

In this Opinion, the Delaware District Court (the “District Court”) dismissed an appeal of the Delaware Bankruptcy Court’s order confirming the plan of reorganization (the “Plan”) of Nuverra Environmental Solutions, Inc. and its affiliated debtors (the “Debtors”).  While the appeal was dismissed on the basis of equitable mootness, the District Court took an extra step and affirmed the entry of the confirmation order.  In doing so, the District Court addressed the propriety of “horizontal… Read More