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

In re LG Philips Displays USA, Inc., Case No 06-10245 (BLS), 2006 WL 1748671 (Bankr. D. Del. June 21, 2006) (Judge Brendan L. Shannon)

Debtor moved to reject a settlement agreement under which debtor conveyed option to purchase real estate, as the Debtor wished to purchase the property itself. The party holding the purchase option objected to the motion. The Court denied the motion, holding that the settlement agreement was not an executory contract that could be rejected under the Bankruptcy Code.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Howard Delivery Serv., Inc. v. Zurich Am. Ins. Co., 126 S.Ct. 2105 (2006) (Justice Ruth Bader Ginsburg)

Resolving a split among the circuits, the Supreme Court held that an insurer’s claim to recover unpaid workers’ compensation premiums in a Chapter 11 case was not entitled to priority treatment under 11 U.S.C. § 507(a)(5) as “contributions to an employee benefit plan.” Insurer Zurich American Insurance Company provided workers’ compensation insurance for debtor Howard Delivery Service, Inc. The Court held that, because the benefits of such coverage inure mainly to the employer, workers’ compensation insurance is not an “employee benefit plan.” Although the Court acknowledged that employees do benefit from such coverage, the greater benefit is to the employer.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Golden v. The Guardian (In re Lenox Healthcare, Inc.), 343 B.R. 96 (Bankr. D. Del. 2006) (Judge Mary F. Walrath)

When Guardian Life Insurance Company of America was sued by the Chapter 11 Trustee for Lenox Healthcare, Inc. for alleged preferential, fraudulent and unauthorized post-petition transfers it received, Guardian moved for summary judgment in part on the basis that the transfers it received were actually deductions taken by Lenox from its employees’ paychecks for the purpose of procuring health benefits. As a result, Guardian argued, the funds received by it were not transfers of the debtor’s interest in property, and therefore were not recoverable as preferences. The Bankruptcy Court (Judge Mary F. Walrath) agreed.

• Email This
• Print
• Comments
• Trackbacks
• Share Link