The United States Supreme Court held in BFP v. Resolution Trust, that properties sold at “force-sale” mortgage foreclosure sales properly conducted pursuant to a state’s foreclosure statute are presumed to have been sold for “reasonably equivalent value” for purposes of Section 548 of the Bankruptcy Code. 511 U.S. 531, 114 S.Ct. 1757 (1994). Accordingly,
“Just enough” is an undeniable—if informal—legal precept. The concept finds its way into canon from adequacy of pleading to application of equity. See, e.g., K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1284 (Fed. Cir. 2013) (A complaint “must give just enough factual detail to provide ‘fair notice of what…
The In re Jevic Holding Corp. chapter 11 case continues to make news. The case is likely best remembered for the 2017 Supreme Court decision holding that the distribution scheme in a structured dismissal of a Chapter 11 case cannot violate the absolute priority rule. The case has since been converted to Chapter 7, and…
On July 9, 2012, Judge Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware issued a memorandum opinion (the “Opinion“), in the Blitz U.S.A. bankruptcy proceeding addressing whether an employee bonus plan is a transaction made in the ordinary course of business under 11 U.S.C. 363(c)(1). The court…
Recently, the Delaware Bankruptcy Court in the Six Flags bankruptcy issued a decision addressing whether an adversary complaint alleged facts sufficient to overcome a motion to dismiss. The Court’s decision provides analysis of recent decisions by the Supreme Court and the Third Circuit regarding standards for pleading. More specifically, the Six Flags decision looks…
Below is a post from Michael Temin, senior counsel with Fox Rothschild. Michael’s post looks at a recent decision by Judge Sontchi in the Leslie Controls bankruptcy.
A discovery dispute gave the bankruptcy court an opportunity to rule on the common interest privilege which, the court said, has completely replaced the joint defense privilege for information sharing among clients with different attorneys, citing In re Teleglobe Communications Corp., 493 F.3d 345, 364 n. 20 (3d Cir. 2007). Leslie Controls, Inc., Case No. 10-12199 (Bankr. D. Del. 9/21/10)(Sontchi, B.J.).
The question presented was whether privileged communications between the debtor and its counsel which were shared pre-petition with the ad hoc committee of asbestos plaintiffs and the proposed future claimants’ representative remained protected from discovery.
On August 3, 2010, Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware issued an opinion in the Qimonda bankruptcy addressing whether Google was entitled to an administrative claim against the Qimonda bankruptcy estate. This post will look briefly at the facts underlying Google’s claim, the holding of…
On June 2, 2009, Judge Kevin J. Carey, Chief Judge of the United States Bankruptcy Court for the District of Delaware, issued an opinion in the Spansion bankruptcy finding that the Debtors’ settlement of various patent cases was not the result of the "sound exercise of the Debtors’ business judgment." Judge Carey’s decision in Spansion is helpful as it provides analysis of what is required in order for a debtor to meet its burden when seeking bankruptcy court approval of a settlement.
Spansion filed for bankruptcy on March 1, 2009. Approximately two weeks after filing for bankruptcy, Spansion entered into a settlement agreement with Samsung Electronics Co. settling two patent infringement cases commenced by Spansion and settling one patent infringement case commenced by Samsung against Spansion. Pursuant to the parties’ settlement agreement, Samsung agreed to pay Spansion $70 million.
The Bankruptcy Code allows for the setoff of “mutual debts” in a bankruptcy proceeding under 11 U.S.C. 553(a). Section 553 makes no reference to non-mutual debts, which courts interpret to mean that non-mutual debts are not subject to setoff under the Bankruptcy Code. Recently, in the SemCrude bankruptcy, the Honorable Brendan L. Shannon issued…
Today in the PPI Holdings bankruptcy, the PPI debtors presented their bid procedures motion which sought approval of the procedures by which PPI would sell substantially all of its assets. PPI’s motion also sought approval of a break-up fee for the stalking horse bidder. In support of the break-up fee, PPI cited the Third Circuit’s decision in Calpine Corp. v. O’Brien Envtl. Energy, Inc. (In re O’Brien Envtl. Energy, Inc.), 181 F.3d 527 (3d Cir. 1999).
Given the increase in bankruptcies, break-up fees will continue to be an issue for debtors and creditors alike. The purpose of this post is to take a look at the O’Brien decision and consider when a break-up fee is appropriate, and the factors courts will consider in deciding to award such fees.