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

Chevron Prods. Co. v. SemCrude, L.P., Case No. 08-11525 (BLS), C.A. No. 09-288 (JJF) (April 30, 2010) (J. Farnan)

Chevron Products Company (“Chevron”) sought relief from the automatic stay (the “Motion for Relief From Stay”) to exercise its contractual right to setoff against certain claims and debts with SemCrude, L.P., SemFuel, L.P., and SemStream, L.P. (collectively the “Debtors”).  On January 9, 2009, the Bankruptcy Court for the District of Delaware (“Bankruptcy Court”), in an order by Judge Shannon, denied the relief sought, holding that no exception to the “mutuality” requirement under § 553 applied.  Chevron filed a motion for reconsideration (the “Motion for Reconsideration”), raising for the first time the safe harbor protections provided under 11 U.S.C. §§ 362(b)(6), (17), (27), 556, 560, and 561.  On March 19, 2009, the Court denied Chevron’s Motion for Reconsideration. 

On Appeal, the District Court held that the Bankruptcy Court correctly denied both the Motion for Relief From Stay and the Motion for Reconsideration.

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Jeoffrey L. Burtch, Chapter 7 Trustee, Factory 2-U Stores, Inc. et al., v. Milberg Factors, Inc., C.A. No. 07-556-JJF-LPS (D.Del. June 4, 2010) (Farnan, J.)

Plaintiff Jeoffrey L. Burtch (“Plaintiff” or Burtch”) is the Chapter 7 Trustee for Factory 2-U Stores, Inc. and its affiliates (collectively, “Factory 2-U”).  The eight defendants (“Defendants”) are engaged in the business of “factoring”.  Plaintiff filed a complaint against Defendants asserting four claims arising from alleged violations of the Sherman Act (“Complaint”).  Defendants moved to dismiss the Complaint.  Magistrate Judge Stark issued a “Report and Recommendation Regarding Motion to Dismiss the Complaint” on March 30, 2009 that was adopted by the District Court.  The District Court then entered an Order dismissing the Complaint.   Plaintiff sought to reopen the Order dismissing his Complaint and sought leave to file an Amended Complaint.

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Moss Landing Commercial Park, LLC v. Kaiser Aluminum Corp. (In re Kaiser Aluminum Corp.), Case No. 02-10429, 2009 WL 150863 (D. Del. Jan. 21, 2009) (Judge Joseph J. Farnan, Jr.)

Moss Landing Commercial Park, LLC (“Moss Landing”) appealed a Bankruptcy Court Order that required Moss Landing to dismiss without prejudice the action it filed against the reorganized Debtors in California. In the California action, Moss Landing sought, among other things, injunctive relief requiring the Debtors to remediate environmental contamination they caused to land purchased by Moss Landing prior to the confirmation of Debtors’ Plan. In its appeal, Moss Landing contended that (1) the bankruptcy discharge did not apply to actions against a reorganized debtor for injunctive relief and (2) the Debtors failed to provide it, a known creditor, with actual notice of the confirmation hearing on the Plan, and therefore, Moss Landing could not be bound by the Plan. The Debtors countered that (1) the Plan injunction bars all entities from commencing or continuing any action on account of any claim or liability arising on or before the Plan effective date, (2) Moss Landing, as a successor in interest to a party who settled the remediation claim with the Debtors, was not entitled to notice, and (3) Moss Landing alternatively moved for money damages and because the injunctive claims could be converted to money damages, the Plan injunction bars the action. 

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Stanziale v. Pepper Hamilton LLP (In re Student Finance Corp.), No. 04-1551 (JJF), 2007 WL 2936195 (D. Del. Oct. 5, 2007) (Judge Joseph J. Farnan, Jr.)

In this adversary proceeding in the United States District Court for the District of Delaware, certain defendants moved to strike damages claims alleged by the trustee of the estate of Student Finance Corporation.  The Court granted the motion, finding that the trustee failed to provide fair notice of these damages claims, as required under Fed. R. Civ. P. 8(a) (made applicable to this adversary proceeding by Fed. R. Bankr. P. 7008(a)). 

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OHC Liquidation Trust v. Discovery Re (In re Oakwood Homes Corp.), C.A. No. 06-436-JJF, 2007 WL 2071730 (D. Del. July 17, 2007) (Judge Joseph J. Farnan, Jr.)

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Hayes v. Genesis Health Ventures, Inc. (In re Genesis Health Ventures, Inc.), Civ. A. No. 06-397 (JJF), Case No. 00-2692 (PJW), 2007 WL 211209 (D. Del. Jan. 26, 2007) (Judge Joseph J. Farnan, Jr.)

The appellant filed a notice of appeal from an order of the Bankruptcy Court imposing sanctions against the appellant. However, although the notice of appeal was dated eight days after the date of entry of the order, it was not filed until fifteen days after the date of entry of the order appealed from. Because the ten day deadline to file a notice of appeal under Federal Rule of Bankruptcy Procedure 8002(a) was jurisdictional, the District Court found that it lacked jurisdiction to adjudicate the appeal.

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Magten Asset Mngmnt. Corp. v. Northwestern Corp. (In re Northwestern Corp.), 352 B.R. 32 (D. Del. 2006) (Judge Joseph J. Farnan, Jr.)

The appellant, a creditor in the debtors’ bankruptcy case, appealed from a Bankruptcy Court decision denying approval under Federal Rule of Bankruptcy Procedure 9019 of the appellant’s motion to approve a global settlement of litigation and claims with the debtors. The District Court affirmed the Bankruptcy Court decision, holding that the express terms of the settlement agreement required that it be approved by the Court prior to becoming effective, and that the settlement agreement could not be approved because it was inconsistent with the debtors’ plan of reorganization. Because the plan had been substantially consummated, it could not be amended.

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