DelawareBankruptcyLitigation

When Will a Bankruptcy Court Allow a Late-Filed Claim?

08/25/12

Federal Rule of Bankruptcy Procedure 3003(c)(3) provides that "the [bankruptcy] court shall fix and for cause shown may extend the time within which proofs of claim or interest may be filed."  For various reasons, creditors sometimes miss the claims "bar date" and need to seek permission from the court to file a late filed claim or deem the late-filed claim allowed.  In order to succeed, the creditor must convince the court that the late claim was the result of excusable neglect.  In re Garden Ridge Corp., 348 B.R. 642, 645 (Bankr. D. Del.

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The Supreme Court Weighs in on Credit-Bidding

08/17/12

On May 29, 2012, the United States Supreme Court issued an opinion in the Radlax Gateway Hotel bankruptcy proceeding regarding the viability of a plan of reorganization that prohibited a bank from credit-bidding on the debtors’ assets.  See Radlax Gateway Hotel, LLC, et al., v. Amalgamated Bank, __S.Ct.__ No. 11-166, 2012 WL 1912197 (U.S. May 29, 2012)(hereinafter “Opinion at * ___”).  The debtors in Radlax (“Debtors”) purchased a hotel at the Los Angeles International Airport, along with an adjacent property.

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Court Applies Divestiture Rule in New Century Bankruptcy Proceeding

08/14/12

Earlier this summer, the Delaware Bankruptcy Court issued an opinion in the New Century Holdings bankruptcy addressing the definition and purpose of the "Divestiture Rule."  See Carr v. New Century TRS Holdings, Inc. (In re New Century TRS Holdings, Inc.), Adv. No. 09-52251(KJC)(Bankr. D. Del.

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Tri-Valley Corporation Files for Bankruptcy in Delaware

08/11/12

Earlier this month, Tri-Valley Corporation and various affiliates (collectively "Tri-Valley" or "Debtors") filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  This post will look briefly at Tri-Valley's business, why the company filed for bankruptcy as well as Tri-Valley's objectives while in bankruptcy.

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A Preference Reference: Common Issues That Arise in Delaware Preference Litigation

07/24/12

We recently finished "A Preference Reference:  Common Issues that Arise in Delaware Preference Litigation."  Delaware has such a high volume of preference litigation, we thought it might be helpful to put together a brief publication that addresses the elements and common defenses to avoidable preference claims.  We wrote the booklet in a format that hopefully is helpful to attorneys and non-attorneys alike. A copy of the "Preference Reference" is available here<

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What are the Scope and Limitations of a Rule 2004 Examination?

07/23/12

Federal Rule of Bankruptcy Procedure 2004(a) states that "[o]n motion of any party in interest, the court may order the examination of any entity."  Courts construing Rule 2004(a) have found its scope "unfettered and broad."  In re Washington Mutual, Inc., 408 B.R. 45, 49 (Bankr. D. Del. 2009), citing In re Bennett Funding Group, Inc., 203 B.R. 24, 28 (Bankr. N. D. N.Y. 1996).  Federal Rule of Bankruptcy Procedure 2004(b) establishes some of the parameters of what is commonly referred to as a "Rule 2004 Examination":

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Gaming Manufacturer, GameTech International, Files for Bankruptcy in Delaware

07/16/12

Earlier this month, GameTech International, Inc., and various related entities (collectively, "GameTech"), filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to GameTech's Declaration in Support of its Chapter 11 Petitions (the "Decl."), the company entered the electronic bingo business in 1994  and the video lottery terminal ("VLT") and slot machine business in 2007.  Decl.

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Northstar Aerospace Files for Bankruptcy in Delaware Due to Negative Profits, Decreased Defense Spending and Lack of Funding

07/15/12

In June, Northstar Aerospace and various related entities (collectively, "Northstar") filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  Northstar describes itself as a supplier of "components and assemblies for the commercial and military aerospace markets."  The company also provides machining, repair and overhaul services for the aerospace industry.  See Northstar's Declaration in Support of First Day Motions (the "Decl.") at *3.  T

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Delaware Bankruptcy Court Finds Bonus Plan Was Created in the Ordinary Course of Business

07/14/12

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.

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Low Steel Prices, High Commodity Prices and a Lack of Cash Force RG Steel to File for Bankruptcy

07/11/12

On May 30, 2012, RG Steel, LLC and various related entities (collectively "RG Steel" or "Debtors") filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  According to the Declaration of the company's CFO (the "Decl."), RG Steel enters bankruptcy as the fourth largest flat-rolled steel company in the United States.  At full capacity,  the company can produce 8.2 million tons of steel per year.  Decl. at 2.

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