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Showing 8 posts by Lauren Dunkle Fortunato.

Delaware Bankruptcy Court Sidesteps Decision on “Novel” Bar to Joinder Doctrine; Movant Failed to Demonstrate Bad Faith For Involuntary Chapter 7 Petition

In re Luxeyard, Inc., 556 B.R. 627 (Bankr. D. Del. 2016)

Declining to opine upon the “bar to joinder doctrine,” the Delaware Bankruptcy Court in this Opinion applied the Third Circuit’s “totality of the circumstances” bad faith test to deny a motion to bar the joinder of additional petitioners to an involuntary petition under Section 303(c) of the Bankruptcy Code.  Simply put, the Debtor did not carry its burden to show there was a bad faith filing, and therefore, the Court need not consider the bar to joinder doctrine. Read More ›

District Court Grants Direct Certification on Question of Whether Bankruptcy Courts Have Power to Transfer Cases under 28 U.S.C. § 1631

Troisio v. Erickson (In re IMMC Corp.), Civ. No. 15-1043 (GMS), 2016 WL 356026 (D. Del. Jan. 28, 2016)

The District of Delaware in this case granted direct certification to the Third Circuit on the question, “whether bankruptcy judges have the authority to order a transfer of an adversary proceeding pursuant to 28 U.S.C. § 1631.”  Op. *4-5.  The issue is whether a bankruptcy court is a “court” as defined in 28 U.S.C. § 610 that is authorized under 28 U.S.C. § 1631 to transfer a civil action to another court for want of jurisdiction.  Determining that the definition of “court” in this circumstance was a pure question of law with no controlling decision of the Third Circuit or United States Supreme Court, Judge Sleet held that certification was required under 28 U.S.C. § 158(d)(2). Read More ›

No “Related to” Jurisdiction Despite Stipulation and Bankruptcy Court Order Governing the Non-Debtor Parties’ Rights and Responsibilities

Seagate Tech. (US) Holdings, Inc. v. Global Kato HG, LLC (In re Solyndra, LLC), 2015 WL 6125246 (MFW) (Bankr. D. Del. Oct. 16, 2015).

In this Memorandum Opinion, Judge Mary Walrath of Delaware’s Bankruptcy Court granted a motion to dismiss an adversary proceeding between two non-debtor parties based on lack of subject matter jurisdiction, and also remanded similar litigation between the parties back to California state court.  Among other things, the Court concluded that an order issued by the Bankruptcy Court approving a stipulation did not confer subject matter jurisdiction over a proceeding between two non-debtors alleging state law claims, where a state court could easily interpret and give effect to it. Read More ›

District Court Denies Motion To Withdraw the Reference In Nortel, May Consider Renewed Motion At A Later Time

SNMP Research Int’l, Inc. v. Nortel Networks, Inc. (In re Nortel Networks, Inc.), No. 15-449 (LPS), 2015 WL 5275966 (D. Del. Sept. 9, 2015)

Chief Judge Stark of the District Court of Delaware recently denied a motion to withdraw the reference of an adversary proceeding in the cross-border bankruptcy case of In re Nortel Networks, Inc.  The Court held that due to the infancy of the proceeding and the Bankruptcy Court’s familiarity with the issues, the Bankruptcy Court would be better suited to preside over the proceeding until, if ever, a jury trial becomes necessary. Read More ›

Delaware Bankruptcy Court Won’t Allow Automatic Stay To Be Used As Litigation “Sword”

In re Scarborough-St. James Corp., --- B.R. ----, 2015 WL 4940043 (Bankr. D. Del. Aug. 18, 2015)

In her Honor’s first published Opinion, Judge Silverstein refused to permit a debtor to use the automatic stay as an offensive litigation tactic and granted a landlord’s motion for relief of the stay so that it could proceed with an eviction proceeding against the debtor.  Using the familiar three-pronged balancing test, the Court held that cause exists to allow the continued action because the debtor will not suffer great prejudice, the hardship to the landlord considerably outweighs the hardship to the debtor, and the landlord made the requisite “slight” showing of probability of success on the merits. Read More ›

Prepetition Representation Of Both LLC And Its Sole Member Did Not Disqualify Law Firm From Representing Sole Member In Post-Petition Adversary Proceeding

Stanziale v. MILK072011, LLC (In re Golden Guernsey Dairy, LLC), Adv. No. 14-50953 (KG), 2015 WL 3669932 (Bankr. D. Del. June 12, 2015)

In this Opinion, Delaware Bankruptcy Court Judge Kevin Gross refused to disqualify a law firm under Model Rules of Professional Conduct (“MRPC”) 1.7 and 1.9 from representing the sole member of an LLC in an adversary proceeding where it previously represented both the member company and the LLC in pre-petition unrelated matters. Read More ›

Delaware District Court Transfers Declaratory Relief Action Based on the Anticipatory Filing Exception to the First Filing Rule

Flintkote Co. v. Aviva P.L.C., No. 13-103-LPS, 2015 WL 1405922 (D. Del. Mar. 25, 2015)

This Memorandum Opinion stems from a Third Circuit reversal of a Delaware District Court ruling that granted a motion to compel arbitration and dismissed as moot a motion to dismiss or, in the alternative, to transfer filed by Defendant Aviva P.L.C. (“Aviva”).  Because the Third Circuit vacated the Order denying the motion to transfer as moot, Aviva renewed its motion.  Such renewed motion is the subject of this Memorandum Opinion.  In granting the relief requested, Chief Judge Stark ruled that the anticipatory filing exception to the first filing rule applied to the facts of this case and transferred venue from District of Delaware to the District of Northern California. Read More ›

Should Administrative Expense Claims Be Valued by the Contract Rate or the Actual Use of the Service?

In re Highway Techs., Inc., No. 13-11326 (KJC) (Bankr. D. Del. Jan. 30, 2015)

In this Memorandum, the Honorable Kevin Carey determined whether to value an administrative expense claim at the full contract rate or the actual use of the goods and services provided to the debtor.  The Court held that the creditor, Wynne Systems (“Wynne”), is entitled to an administrative claim for only the debtor’s actual use.  In doing so, the Court also denied Wynne’s request for attorney’s fees as an administrative claim, holding that those fees are not an actual and necessary cost of preserving the estate as required by Bankruptcy Code section 503(b). Read More ›