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

Mission Towers v. W.R. Grace, C.A. No. 07-287 (D. Del. Dec. 6, 2007) (Senior Judge Ronald L. Buckwalter)

The law firm of Speights & Runyan filed thousands of claims on behalf of creditors in the W.R. Grace & Co. bankruptcy.  The debtors moved to expunge and disallow 71 of the claims, contending that Speights & Runyan lacked express authority to file the proofs of claim as of the time that they were filed.  The United States Bankruptcy Court for the District of Delaware held that, although a claimant may authorize the filing of a claim after it is filed, if the ratification occurs after the bar date has passed, that ratification is insufficient to make the claim timely filed.  Accordingly, because authorization for these 71 claims was not established as of the deadline for filing proofs of claim, the Court expunged and disallowed the claims.  The United States District Court for the District of Delaware affirmed.

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In re Exide Techs., No. 02-11125 (KJC), 2007 WL 4268763, – B.R. – (Bankr. D. Del. Dec. 5, 2007) (Judge Kevin J. Carey)

A former executive vice-president of the debtor, Exide Technologies, filed a motion to enforce the debtor’s plan of reorganization, arguing that a retirement payment program that he entered into with the debtor was an executory contract that the debtor assumed under its plan.  The United States Bankruptcy Court for the District of Delaware denied the motion, finding that the contract between the parties to enter into the program lacked mutuality of obligation because the only remaining obligations thereunder belonged to the debtor.  Accordingly, it was not an executory contract that could be assumed.  The Court also determined that the plan was not a retiree benefits program under 11 U.S.C. § 1114 that could not be terminated by the debtor.

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Synova Healthcare Group, Inc. and its affiliated debtors filed petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.  The debtors filed these cases, over which Judge Christopher S. Sontchi is presiding, on December 18, 2007.

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MAS Litigation Trust v. Plastech Engineered Prods. (In re Meridian Automotive Sys.-Composite Ops. Inc.), Adv. Pro. No. 07-51196 (KG), 2007 WL 4322527 (Bankr. D. Del. Dec. 5, 2007) (Judge Kevin Gross)

Plastech Engineered Products, Inc., a defendant in an avoidance action commenced by the MAS Litigation Trust, moved to dismiss the plaintiff’s amended complaint on the grounds that, inter alia, the new claims set forth in the amended complaint did not relate back to the original complaint.  In a matter related to one we discussed here last week, The United States Bankruptcy Court for the District of Delaware granted the motion, finding that the new claims did not seem to arise out of the same transactions described in the original complaint.  However, the Court granted the plaintiff twenty days to amend the complaint, if it could allege facts sufficient to show the additional claims related back to the original ones.

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Delta Financial Corporation became the latest subprime lender casualty when it filed a Chapter 11 petition yesterday in the United States Bankruptcy Court for the District of Delaware.  Related debtors Delta Funding Corporation, Renaissance REIT Investment Corp. and Renaissance Mortgage Investment Corporation also filed petitions in these cases that are being presided over by Judge Christopher S. Sontchi.

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In re Winstar Comms., Inc., Nos. 01-1430 (KJC)–01-462(KJC), -- B.R. --, 2007 WL 4268775 (Bankr. D. Del. Dec. 4, 2007) (Judge Kevin J. Carey)

Professionals retained by the Chapter 7 Trustee of the estate of debtor Winstar Communications, Inc. filed a motion to approve a hedging transaction with a lender under which they would receive a fixed price payment from the lender in return for the lender paying all or some of the contingency fees that counsel would receive for representing the trustee in an adversary proceeding.  The United States Bankruptcy Court for the District of Delaware found that this transaction was a form of fee sharing that was prohibited under 11 U.S.C. § 504.  Accordingly, the Court denied the motion, without prejudice to the professionals’ ability to seek the approval of a revised arrangement.

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MAS Litigation  Trust v. Plastech LDM (In re Meridian Automotive Sys.-Composite Ops., Inc., Case No. 05-11168 (MFW), Adv. Pro. No. 07-51195 (KG), 2007 WL 4292130 (Bankr. D. Del. Dec. 5, 2007) (Judge Kevin Gross)

The trustee of the litigation trust for the estate of debtor Meridian Automotive Systems, Inc. attempted to serve an adversary complaint by naming and serving an entity that does not exist, and addressed such service to an incorrect address and without addressing service to an officer or agent of the defendant.  On the putative defendant’s motion, the United States Bankruptcy Court for the District of Delaware dismissed the complaint, finding that service did not comport with the requirements of Fed. R. Bankr. P. 7004(b)(3).

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