Delaware Chapter 11 Filings - 2008
Commercial Chapter 11 case filings in the United States Bankruptcy Court for the District of Delaware in 2008:
Continue Reading...Retiree's SERP Plan Was Not An Executory Contract and Was Not A Retiree Benefits Plan Under 11 U.S.C. § 1114
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.
Chapter 7 Trustee's Counsel's Effort to Enter Into Hedging Transaction With Respect to Anticipated Contingency Fees was Impermissible Fee Sharing
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.
Delaware Chapter 11 Filings - 2007
Commercial Chapter 11 case filings in the United States Bankruptcy Court for the District of Delaware in 2007:
Continue Reading...New Century Mortgage Corporation files Bankruptcy In Delaware
On Monday, April 2, 2007, New Century Mortgage Corporation and certain affiliated companies filed for bankruptcy protection in the United States Bankruptcy Court for the District of Delaware pursuant to chapter 11 of the Bankruptcy Code. New Century listed assets and liabilities each in excess of $100 million. New Century's counsel is O'Melveny & Myers, LLP in San Francisco, California. New Century's Delaware counsel is Richards, Layton & Finger, P.A.
Party That Received Checks From Debtor, But Did Not Have Right To Payment, Who Then Forwarded Checks To Party With Right To Payment From Debtor, Held Not To Be "Transferee" For Purposes Of Preference Complaint
Broadway Advisors, LLC v. Hipro Elecs., Inc. (In re Gruppo Antico, Inc.), 359 B.R. 578 (Bankr. D. Del. 2007) (Judge Kevin J. Carey)
Vendor Hipro Electronics, Ltd. of Taiwan sold computer parts to the debtor prior to the commencement of the debtor’s bankruptcy case. However, in the period running up to the petition date, the debtor sent payments for Hipro Taiwan invoices to another Hipro entity, Hipro Electronics, Inc., in Texas. Hipro USA forwarded those checks to Hipro Taiwan, who deposited the checks into their own account. The debtor, however, commenced a preference action against Hipro USA. Hipro USA filed a motion for judgment on the pleadings. The court held that, because Hipro USA never deposited the funds, it was not a transferee of the debtor, and therefore could not be liable for the avoidance of the payments that the debtor sent to Hipro USA.
Continue Reading...Sale Order Does Not Protect A Non-Debtor Subsidiary Sold During Bankruptcy From Preference Action
Amphenol Corp. v. Shandler (In re Insilco Techs., Inc.), 351 B.R. 313 (Bankr. D. Del. 2006) (Judge Kevin J. Carey)
Amphenol challenged the filing of a preference action against PCM, a non-debtor subsidiary it had purchased from the debtor, because the order approving the sale did so free of all liens and encumbrances. The Court interpreted the sale agreement and order as releasing Amphenol from the estate’s claims related to the purchase and ownership of PCM’s stock, but not releasing PCM itself from any estate actions, as PCM was a distinct corporate entity from Amphenol.
Continue Reading...Trademark License Was Executory, And Debtor's Rejection Was Supported By Business Judgment
In re Exide Techs., 340 B.R. 222 (Bankr. D. Del. 2006 (Judge Kevin J. Carey)
The debtor sought to reject a trademark agreement and the other party to the agreement argued that the agreement was not executory and, if the agreement was executory, the debtor did not exercise proper business judgment in rejecting the agreement. The Court held that the agreement was executory and approved the debtor’s decision to reject the agreement holding that the debtor exercised proper business judgment.
Continue Reading...Proofs Of Claim Of Debtor's Former Employees Terminated Within Ninety Days Before Petition Date Allowed Because Right To Severance Is Based On Termination Date, Not On Date Of Employment Contracts
In re Garden Ridge Corp., Case No. 04-10324 (KJC), 2006 WL 521914 (Bankr. D. Del. March 2, 2006) (Judge Kevin J. Carey)
Two former employees of the Debtor had employment contracts entitling them to severance pay if they were terminated without cause. Both former employees were fired within the 90 day period preceding the Petition Date. Each filed a proof of claim asserting they were entitled to an unsecured priority claim of $4,650, pursuant to 11 U.S.C. § 507(a)(3), on the basis that their severance compensation was “earned within 90 days before the date of the filing of the petition.” The Debtor objected to both claims, asserting that the right to payment accrued when the employees each entered into their respective employment contracts. The Court held that the employees held valid claims under section 507(a)(3) because the significant date was the date of termination, not the date of their employment contracts.
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