Recent Developments in Bankruptcy Law

Today, President Biden signed into law the Bankruptcy Threshold Adjustment and Technical Corrections Act, S. 3823, 117th Cong. (the “Act”), which, among other things, continues the temporary expansion of subchapter V eligibility.  Section 1182(i)(B)(1) of the Bankruptcy Code originally limited the term “debtor,” for subchapter V purposes, to a person engaged in commercial or business

On March 14, 2022, Senator Chuck Grassley (R-IA) introduced proposed legislation that—if enacted—would make permanent the $7.5 million debt limit applicable to debtors under subchapter V of chapter 11 of the Bankruptcy Code that has enjoyed only temporary status under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) for the

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

Introduction

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.

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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.


Continue Reading The Common Interest Privilege

Introduction

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

Introduction

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. 

Background

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.

Continue Reading Decision in Spansion Finds That Debtors Did Not Demonstrate Sound Business Judgment in Settlement of Patent Litigation