HHR Bankruptcy Report

Category Archives: Delaware

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Does Stern v. Marshall Prohibit Non-Consensual Third Party Releases of Non-Bankruptcy Claims in Plans of Reorganization?

Posted in Delaware, Stern v. Marshall, Third party release
An increasingly common aspect of Chapter 11 plans is non-consensual third party releases, which are often a vital tool required to obtain global peace among competing constituencies whose support is often needed for a debtor to obtain confirmation of a Chapter 11 plan. However, the parameters of a bankruptcy court’s Constitutional authority to approve such… Continue Reading

Delaware Bankruptcy Court Rejects Attempt to Indemnify Committee Counsel for Costs of Defending Fees

Posted in Delaware, Professional fees, Section 328(a)
In In re Boomerang Tube, Inc.,[1] the United States Bankruptcy Court for the District of Delaware refused to approve a proposed retention application that would have required the bankruptcy estate to reimburse counsel for the committee of unsecured creditors for fees and expenses the counsel incurred in any successful defense of their fees in the… Continue Reading

Third Circuit Allows Debtors’ Funds Purchased in Section 363 Sale to Bypass IRS and be Distributed to Administrative and Unsecured Creditors

Posted in Delaware, Section 363, Third Circuit
The Third Circuit has affirmed the Delaware Bankruptcy Court’s approval of a section 363 sale and related settlement agreement over IRS’s objection to provisions in the sale and settlement agreements that provide payments to unsecured creditors and other administrative creditors while leaving the IRS with no recovery. While the IRS argued that the sale and… Continue Reading

Baha Mar Creditors Head Back to Bahamas

Posted in Chapter 11, Cross-Border Restructuring, Delaware
On Tuesday, September 15, 2015, Judge Kevin J. Carey, United States Bankruptcy Judge for the District of Delaware, granted motions to dismiss Chapter 11 proceedings relating to the failed Baha Mar resort project filed by Baha Mar’s Bahamian creditors CCA Bahamas Ltd. and Export-Import Bank of China.  The Debtors include fourteen corporations based in the… Continue Reading

Structured Dismissal: The “Least Bad Alternative”

Posted in Chapter 11, Delaware, Third Circuit
The Third Circuit, in Official Committee of Unsecured Creditors v. CIT Group/Business Credit Inc. (In re Jevic Holding Corp.),[1] became the first court of appeals to approve the settlement and dismissal of a chapter 11 case. Structured dismissals, as understood by the Third Circuit, are “simply dismissals that are preceded by other orders of the… Continue Reading

Delaware Court Clarifies Creditor-Derivative Standing And Directors’ Fiduciary Duties To An Insolvent Corporation And Its Creditors

Posted in Creditors' Rights, Delaware, Fiduciary Duty, Structured Finance
In what may become a precedential analysis of the cardinal principles of Delaware corporate and bankruptcy law, the Delaware Court of Chancery recently issued a decision in Quadrant Structured Products Co., Ltd. v. Vertin, extensively discussing the rights of an insolvent company’s creditors to pursue derivative claims against the company’s directors and provided guidance to… Continue Reading

In re Fisker: Delaware Bankruptcy Court Imposes Roadblock to Credit Bidding

Posted in Chapter 11, Delaware, Section 363
In considering a Section 363 asset sale in In re Fisker Automotive Holdings, Inc., , the United States Bankruptcy Court for the District of Delaware used its “for cause” power under Section 363(k) to limit the proposed purchaser’s credit bid and trigger a competitive cash auction for the debtor’s assets.  2014 WL 210593 (Bankr. D.… Continue Reading