Delaware Business Bankruptcy Report : Delaware Business Bankruptcy Report : Morris James LLP Lawyers & Attorneys

In re Oakwood Homes Corp., 342 B.R. 59 (Bankr. D. Del. 2006) (Judge Peter J. Walsh)

Defendants moved to dismiss an adversary complaint seeking recovery of funds related to a surety bond and to a letter of credit.

The Court dismissed the counts in the complaint that sought to recover the letter of credit and the proceeds of the letter of credit as neither was property of the estate. However, the Court denied the motion to dismiss counts which sought to recover for alleged contract breaches between the debtors and the Defendants because the estate had a recognized interest in the contractual and equitable claims of the debtor, which were property of the estate.
The Court also granted leave to amend two fraudulent transfer counts.

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In re ANC Rental Corp., 341 B.R. 178 (Bankr. D. Del. 2006) (Judge Mary F. Walrath)

The claimant, Joan Martin, filed a motion for allowance and payment of an administrative expense against the estate of the debtors. The claim arose out of a pre-petition agreement under which the claimant rented a car from debtor Alamo Rent-A-Car. Martin was involved in a serious car accident in which two died. Post-petition, representatives of the other parties to the accident sued Martin and the debtors, who were found jointly and severally liable. The Minnesota court presiding over that matter found that the debtors had an indemnity obligation to Martin, and found the debtors primarily liable for payment of damages. Martin paid the settlement amount, and then filed an administrative expense motion against the debtors’ estate. The Bankruptcy Court denied the motion, finding that the indemnity obligation was an implied term of the car rental agreement, and therefore was a pre-petition obligation of the debtors that was not entitled to be allowed and paid as an administrative expense.

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