DelawareBankruptcyLitigation

On October 8, 2015, Malibu Lighting Corporation and 6 affiliates filed for relief under chapter 11 of the Bankruptcy Code.  The cases are jointly administered under Case Number 15-12080 and presided over by Judge Gross.  The first day hearing was held on October 9, 2015.  The second day hearing is scheduled for October 27, 2015 at 10:00 a.m.

From October 1, 2015 through October 31, 2015, the United States Bankruptcy Court for the District of Delaware will be instituting its annual process to review and consider comments to the Local Rules.

On September 14, 2015, the Third Circuit released a precedential opinion (the “Opinion”) which addressed payments from a buyer to non-debtor parties in a 363 sale.  The Third Circuit’s opinion is available here.  If you prefer the version of the Opinion published by Westlaw, it is ICL Holding Company, Inc., et al. v. United States, 2015 WL 5315604 (3d Cir. Sept. 14, 2015).

Very often in the course of a bankruptcy proceeding, a creditor with a pending lawsuit against the debtor will need to obtain relief from the automatic stay in order to continue to prosecute the pre-petition litigation.   For example, personal injury claimants who seek to recover solely against an insurance policy of a debtor may obtain relief from the automatic stay in certain circumstances.  Such claimants will need to file a motion with the Delaware Bankruptcy Court to obtain relief from the stay in order to pursue their claim to a final judgment.

In a prior post, we discussed the ruling of the Northern District of California Bankruptcy Court in the In re Howrey LLP case, whereby the Court found that claims for unpaid rent of landlords of an involuntary debtor were entitled to priority status. Recently, the creditors’ committee in the Howrey bankruptcy case appealed the decision.