Delaware Bankruptcy Insider:
Be In The Know

About This Blog


The Delaware Bankruptcy Insider is a premier blog designed to bring its readers a comprehensive analysis of the latest Delaware corporate bankruptcy news and rulings.  Brought to you by Ashby & Geddes, P.A.

Get Updates By Email

Topics

Judges

Recent Posts

Helpful Links


Federal Courts App
 (iTunes)
Federal Courts App (Google Play)
The Bankruptcy Code
Delaware Bankruptcy Court                                                                          Delaware Bankruptcy Court - Local Rules and Orders
Delaware District Court
Third Circuit Court of Appeals
U.S. Supreme Court
The United States Courts
Office of the United States Trustee for the Third Circuit
Delaware Bankruptcy American Inn of Court

For more information


Karen B. Skomorucha Owens, Esq.
(302) 504-3725
kowens@ashby-geddes.com

Aaron H. Stulman, Esq.
(302) 504-3728
astulman@ashby-geddes.com

Ashby & Geddes, P.A.
500 Delaware Avenue
P.O. Box 1150
Wilmington, Delaware 19899-1150
(302) 654-1888               

Showing 12 posts recarding Delaware District Court.

Stern Requires More Than Subject Matter Jurisdiction, Bankruptcy Court Must Also Have Constitutional Adjudicatory Authority to Approve Nonconsensual Third-Party Releases in a Plan

Opt-Out Lenders v. Millennium Lab Holdings II, LLC, No. 16-110-LPS, --- F.Supp.3d ----, 2017 WL 1032992 (D. Del. Mar. 17, 2017) corrected and superseded by 2017 WL 1064997 (D. Del. Mar. 20, 2017)

In this Opinion, the United States District Court for the District of Delaware (the “District Court”) examines the bankruptcy court’s authority post-Stern v. Marshall, 131 S. Ct. 2594 (2011), to enter a final order releasing and permanently enjoining a non-debtor’s state law fraud and federal RICO claims against non-debtors absent consent.  Following two recent United States Supreme Court cases—Stern and Wellness Int’l Network, Ltd. v. Sharif, 135 S. Ct. 1932 (2015)—it is clear that parties have a constitutional right to have state law claims adjudicated by an Article III court.  “Despite the District Court’s general referral of bankruptcy matters to the Bankruptcy Court, the extent of the Bankruptcy Court’s adjudicatory authority depends on the type of proceeding before it and is subject to the bounds of [these] constitutional limitations . . . .”  Op. at 3.  For core proceedings (i.e., those that “arise under title 11” or “arise in a case” under title 11), bankruptcy judges can enter final orders.  When a matter is non-core (i.e., “related to” the bankruptcy case), however, absent consent of the parties, bankruptcy judges have authority only to hear the matter and submit proposed findings of fact and conclusions of law to the district court. Read More ›

Delaware District Court’s Amended Local Rules Become Effective August 1, 2016

On August 1, 2016, the newly amended Local Rules of Civil Practice and Procedure of the United States District Court for the District of Delaware will go into effect.  Of particular importance to bankruptcy practitioners, the Delaware District Court has made it clear through the local rule amendments that bankruptcy appeals are not subject to Local Rules 7.1.2 (setting forth, among other things, the timetable for motion practice), 7.1.3 (prescribing the form and contents of briefing and appendices filed with the Delaware District Court), 7.1.4 (governing oral argument), and 7.1.5 (governing reargument requests). 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 ›

District Court Affirms Bankruptcy Court Decision on Ordinary Course of Business and Remands Subsequent New Value and Prejudgment Interest Rulings for Further Findings

Prudential Real Estate v. Burtch (In re AE Liquidation, Inc.), Civ. Nos. 13-1504 & 13-1505 (LPS), 2015 WL 5301553 (D. Del. Sept. 10, 2015), aff’g in part, rev’g in part Burtch v. Prudential Real Estate (In re AE Liquidation, Inc.), Nos. 08-13031 & 10-55543 (MFW), 2013 WL 3778141 (Bankr. D. Del. July 17, 2013)

In this appeal and cross appeal to the Delaware District Court, Judge Leonard P. Stark affirmed a Bankruptcy Court ruling that payments made an average of 17 days faster during the preference period were not eligible for the ordinary course of business defense under section 547(c)(2) of the Bankruptcy Code.  Judge Stark also ruled that, under the Third Circuit’s Opinion in In re Friedman’s, Inc., subsequent new value cannot include post-petition new value, and that bankruptcy judges must provide reasons for denying prejudgment interest in preference cases.  He remanded the latter two issues to the Bankruptcy Court for further findings. Read More ›

District Court Finds a Series of Agreements to be One – Reverses and Remands to Bankruptcy Court

Huron Consulting Servs., LLC v. Physiotherapy Holdings, Inc. (In re Physiotherapy Holdings, Inc.), No. 14-693 (LPS), 2015 WL 4205146 (D. Del. July 13, 2015)

In the spring of 2014, the Delaware Bankruptcy Court was presented with a contested assumption dispute involving six agreements between Physiotherapy Holdings Inc. and its various affiliates (together, the “Debtors”) and Huron Consulting Services, LLC (“Huron”).  While the Debtors sought to assume just one – a Licensing Agreement necessary to ongoing operations – Huron argued that all six agreements were integrated and must be assumed together or not at all.  For reasons discussed in our previous post, Judge Gross sided with the Debtors, allowing them to assume only the Licensing Agreement.  This appeal followed. 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 ›

Practice Point: Direct Appeals to the Third Circuit When A Majority Of Appellants And Appellees Agree

Stanziale v. Car-Ber Testing, Inc. (In re Conex Holdings, LLC), --- B.R. ---- (D. Del. Mar. 23, 2015)

This Memorandum involves a request for direct appeal from a Bankruptcy Court Order granting summary judgment in favor of Car-Ber Testing, Inc. (the “Appellee”) on its new value defense to certain preferential payments received from Conex Holdings, LLC (with its affiliated entities, the “Debtors”).  Delaware’s District Court denied the request of the chapter 7 trustee (the “Appellant”) despite Appellee joining in the request, ruling that Appellant had not shown that (i) no controlling authority or matter of public importance existed; (ii) conflicting decisions required resolution; or that (iii) direct appeal would materially advance the progress of the case.  28 U.S.C. § 158(d). Read More ›

A Simple Example: Withdrawal Of The Reference Denied By Delaware District Court Despite Federal RICO Claim

Barry v. Santander Bank, N.A. (In re Liberty State Benefits of Delaware Inc.), Civ. No. 14-677-LPS (D. Del. Mar. 12, 2015)

On March 12, 2015, Chief Judge Stark of Delaware’s District Court denied the request of defendant Santander Bank, N.A. (the “Defendant”) to withdraw the reference, rejecting Defendant’s arguments for mandatory and permissive withdrawal.  Richard Barry, the chapter 11 trustee of the debtor (the “Plaintiff”), alleged in the complaint almost entirely non-bankruptcy causes of action, including violations of the federal Racketeering Influenced and Corrupt Organization Act (“RICO”)—the sole basis for the Defendant’s mandatory withdrawal request.  Ultimately, the Court found, under Delaware precedent, that consideration of the federal RICO claim was not “substantial and material” to resolving the proceeding and thus, the claim alone did not warrant mandatory withdrawal.  Likewise, the Court held that the Defendant was unable to carry its burden for permissive withdrawal “for cause shown.” Read More ›

EFH Debtors’ First Lien Settlement and Related Tender Offer Upheld by District Court

Delaware Trust Co. v. Energy Future Immediate Holdings, LLC (In re Energy Future Holding Corp.), No. 14-723 (RGA) (D. Del. Feb. 19, 2015)

Energy Future Holding Corporation and its subsidiaries (the “Debtors”) commenced their chapter 11 proceedings with a series of settlements (together, the “Global Settlement”) reached with certain key creditor constituencies.  Although the Global Settlement was later withdrawn in large part, the Debtors sought and obtained Bankruptcy Court approval of their settlement (“First Lien Settlement”) reached with the $4 billion first lien noteholders of debtor Energy Future Intermediate Holdings, LLC.  Pursuant to the First Lien Settlement, a tender offer was proposed in order to exchange the first lien notes (comprised of approximately $3.5 billion of 10% notes due 2020 and approximately $500 million of 6 7/8% notes due 2017) for new debt obligations to be issued under the Debtors’ postpetition DIP facility.  Premiums were to be placed on the noteholders’ outstanding principal (5%) and accrued interest (1%).  In exchange, the noteholders would release all claims related to existing make-whole litigation. Read More ›

Practice Point: District Court Weighs in on Submission of Orders Under Certification of Counsel

Burtch v. Avnet, Inc., No. 13-060-LPS, 2015 WL 24318  (D. Del. Jan. 16, 2015)

This District Court Memorandum Order offers a cautionary tale to practitioners as to the proper—and often improper—use of certifications of counsel. Read More ›