DelawareBankruptcyLitigation

How does the “automatic stay” of the bankruptcy code apply to landlords?

02/01/15

The automatic stay is one of the most powerful protections provided to debtors in a bankruptcy proceeding.  The stay acts as an injunction that prohibits creditors (including landlords) from commencing or continuing any proceeding against the debtor which could have been commenced prior to the bankruptcy.  Applied to landlords, the automatic stay prohibits efforts to collect unpaid rent, or seek eviction, setoff, lease termination or foreclosure, among others.

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Powerwave Preference Actions Filed

01/30/15

From January 23-27, 2015, Charles A. Stanziale, Jr., as the Chapter 7 Trustee (the “Trustee”) of Powerwave Technologies, Inc. (“Powerwave” or the “Debtor”), filed approximately 102 preference complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code.

Background

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What Effect Does a Tenant’s Bankruptcy Have on a Lease?

01/24/15

Once a tenant files for bankruptcy, it has three options regarding the lease: it can assume the lease and continue performing all obligations, or assume and assign the lease to a third party, or reject the lease and surrender the premises and terminate performance. Section 365 of the Bankruptcy Code gives the bankrupt tenant 120 days to decide if it will assume or reject the lease. During this period, the tenant can request one 90 day extension of time to decide whether to assume or reject.

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Lessons from Chapter 13 – When is 8% Not Really 8%

01/23/15

In ruling on a very unfortunate situation (more on that below), Judge Shannon issued an opinion on July 24, 2014 in the Aro bankruptcy, holding that a state court decision concerning the validity of a lien cannot be challenged in Bankruptcy Court.  In the opinion in this case issued on January 22, 2015 (the “Opinion”), Judge Shannon analyzed the value of the lien and applicable interest rates.  The Opinion is available here.

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Caesars Bankruptcy: Illinois Bankruptcy Proceeding Stayed by Delaware Bankruptcy Court

01/18/15

On January 12, 2015, Appaloosa Investment LP and funds affiliated with Oaktree Capital and Tennenbaum Capital filed an involuntary bankruptcy petition against Caesars Entertainment Operating Company, Inc. (“Caesars”) with the United States Bankruptcy Court for the District of Delaware.  The petitioning creditors are junior noteholders of the debtor.

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Egenix Formation Meeting and Section 341 Meeting of Creditors Scheduled

01/11/15

In the Egenix bankruptcy proceeding, a formation meeting has been scheduled for Thursday, January 22, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, Fifth Fl., Room 5109, Wilmington, DE 19801.  Click here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.

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Capital Leases in Bankruptcies – A Lesson from Xchange Technology Group

01/03/15

In a  9-page opinion released December 30, 2014 in the Xchange Technology Group bankruptcy (Bank. D. Del.

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Egenix, Inc. First Day Hearing Scheduled for January 6, 2015

01/02/15

There have been several developments in the Egenix, Inc. (“Egenix” or “Debtor”) bankruptcy case pending in the District of Delaware.  To review the initial article posted about this bankruptcy action on December 28, 2014, click here.

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