DelawareBankruptcyLitigation

In a 5 page decision signed July 18, 2016, Judge Walrath of the Delaware Bankruptcy Court ruled on a Motion for Judgment on the pleadings that undelivered stock options, are not debt, but are instead equity. Judge Walrath’s opinion is available here (the “Opinion”).  This decision was made in the GSE Environmental case, Adversary No. 16-50377 (MFW).

On July 1, 2016, Gold Alchemy LLC filed for Chapter 7 bankruptcy protection with the U.S. Bankruptcy Court for the District of Delaware.  According to the petition, the debtor’s estimated assets are $10 to 50 million, and estimated liabilities are $50 to 100 million.

Alchemy is a distribution company formerly known as Millennium Entertainment.  According to Deadline Hollywood:

On June 29, 2016, Judge Sleet of the Delaware District Court entered an order denying a motion for stay of the Debtors’ plan confirmation pending appeal.  A copy of the related Opinion is attached here.

On June 16, 2016, the Official Committee of Unsecured Creditors (the “Committee”) of Kid Brands Inc., et al. (the “Debtors”), filed approximately 64 complaints seeking the avoidance and recovery of allegedly preferential and fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code.  The Committee also seeks to disallow claims of such preference defendants under Sections 502(d) and (j) of the Bankruptcy Code.

In the recent decision of Gavin Salmonese, LLC v. Shyamsundar, et al. (In re AmCad Holdings, LLC, et al.) (Bankr. D. Del. June 14, 2016), Judge Walrath considered whether a liquidation trustee had standing to bring a claim for breach of fiduciary duty against the debtors’ former D&Os when the post-confirmation trust was the recipient of a wholesale assignment of causes of action, without specifying breach of fiduciary duty claims.