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

Hechinger Inv. Co. of Del. v. Universal Forest Prods., Inc. (In re Hechinger Inv. Co. of Del.), 489 F.3d 568 (3d Cir. 2007) (Circuit Judge Marjorie O. Rendell)

The Third Circuit reversed a Bankruptcy Court decision in an avoidance and recovery action brought by debtors Hechinger Investment Company of Delaware against Universal Forest Products, Inc. that held that the contemporaneous exchange for new value defense to a preference cause of action was not available where the parties intended a credit relationship. Instead, the Third Circuit found that this defense applies to little other than a credit relationship, and remanded to the Bankruptcy Court for a determination of whether the parties intended that the payments in question were intended by the parties to be contemporaneous exchange for new value.

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George L. Miller, Chapter 7 Trustee of World Health Alternatives, Inc. v. McDonald (In re World Health Alternatives, Inc.), 369 B.R. 805 (Bankr. D. Del. 2007) (Judge Peter J. Walsh)

The United States Bankruptcy Court for the District of Delaware held that the Chapter 7 trustee of the estate of debtor World Health Alternatives, Inc. was not entitled to a preliminary injunction to prevent the settlement of litigation pending against the debtor’s officers and directors in the United States District Court for the Western District of Pennsylvania. The Trustee sought to preserve, as alleged property of the estate, the proceeds of a directors and officers liability policy that provided coverage, first to the debtor’s officers and directors, then to the debtor for indemnification claims by the officers and directors and, lastly, for direct claims against the debtor. The trustee failed to demonstrate a likelihood of success on the merits in establishing that the proceeds were included in the property of the estate because there were no claims directly against the debtor in the District Court litigation, and because the directors and officers did not assert any indemnification claims against the debtor under the policy.

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On Monday, June 11, 2007, Tweeter Home Entertainment Group, Inc. and certain related companies filed voluntary Chapter 11 bankruptcy petitions in the United States Bankruptcy Court for the District of Delaware.  An exhibit to the petition lists $258.6 million in total assets and $190.4 million in total debts.  The Tweeter petition has been given case number 07-10787 and the case has been assigned to The Honorable Peter J. Walsh. Continue Reading...

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On June 1, 2007, Amp’d Mobile, Inc. filed a voluntary petition for relief under Chapter 11 in the United States Bankruptcy Court for the District of Delaware.  Judge Brendan Linehan Shannon has been assigned to the case.

 

Amp’d, a provider of mobile phone and entertainment services, proposes to continue to operate out of cash collateral while continuing to seek debtor-in-possession financing.  On June 5, 2007, Judge Shannon approved the debtor’s cash collateral motion on an interim basis, pending a final hearing on June 20, 2007.

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On May 29, 2007, InSight Health Services Holdings Corp. (Case No. 07-10700) and InSight Health Services Corp. (Case No. 07-10701) filed voluntary petitions in the United States Bankruptcy Code for the District of Delaware for relief under Chapter 11 of the Bankruptcy Code.  The debtors are proposing a prepackaged plan that effects a debt to equity swap to alleviate the burdens upon the debtors from extensive senior subordinated note debts. 

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