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Showing 6 posts recarding Judge Brendan L. Shannon.

Delaware Bankruptcy Court Refuses to Enforce an Employee Arbitration Agreement with a Class Action Waiver Despite Its Opt-out Provision

Chan v. Fresh & Easy, LLC (In Fresh & Easy, LLC), No. 15-51897 (BLS), 2016 WL 5922292 (Bankr. D. Del. Oct. 11, 2016)

In this motion to compel arbitration Opinion, the Bankruptcy Court for the District of Delaware ruled on two issues of first impression in Delaware:  (i) whether a class action waiver provision in an arbitration agreement violates the National Labor Relations Act (the “NLRA”); and if so, (ii) whether the agreement remains enforceable if it allows an employee to opt-out.  The Court found that the class action waiver was unenforceable because it violated the NLRA.  The Court then held that the opt-out provision in the agreement did not save the class action waiver. Read More ›

The Threshold Necessary for a “Substantial Contribution” Finding under Bankruptcy Code Section 503(b)(3)(D) is “Exceedingly Narrow” in Delaware

In re RS Legacy Corp., No. 15-10197, 2016 WL 1084400 (Bankr. D. Del. Mar. 17, 2016) (BLS)

In this Opinion, Judge Shannon denied an individual’s request for allowance and payment of an administrative expense claim for his substantial contribution to the case under Bankruptcy Code section 503(b)(3)(D) in the amount of $203,105.51, which consists of his counsel’s fees and expenses.  In so holding, the Court followed a well-developed body of case law showing that the threshold necessary for a contribution to be “substantial” is exceedingly narrow and such efforts cannot be self-interested. Read More ›

Sword of Damocles Trumped By Finality in Confirmation Order

In re East West Resort Development V, L.P., L.L.L.P., No. 10-10452 (BLS), 2014 WL 4537500 (Bankr. D. Del. Sept. 12, 2014)

On April 23, 2013, the Delaware Bankruptcy Court reopened the bankruptcy case of reorganized debtor Northstar Iron Horse, LLC (“Iron Horse”) in order to consider a creditor’s request for a Rule 2004 examination of Iron Horse and two other affiliated reorganized debtors. The request related to the creditor’s attempt to augment the distribution it received on account of its claim pursuant to the confirmed plan by recovering the proceeds of a post-confirmation settlement reached between Iron Horse and its insurance company, ACE American Insurance Company (“ACE”).  In this Opinion, Judge Shannon denied the Rule 2004 motions as futile, finding that the confirmed plan prevented further recovery and that the period to challenge the confirmation order long since expired. Read More ›

In Determining Whether a Claim is Core, the Focus Should Be on the Nature of the Dispute, Not Its Significance (Economic or Otherwise) to the Debtors and Their Estates

Longview Power, LLC v. First Am. Title Ins. Co. (In re Longview Power, LLC), Adv. No. 14-50369 (BLS), Memorandum Order, Adv. Docket No. 57 (Bankr. D. Del. Aug. 12, 2014)

In the Longview Power bankruptcy proceedings, the debtors (the “Debtors”) have proposed a chapter 11 plan of reorganization that contemplates satisfying, if ultimately allowed, certain mechanics’ lien claims asserted in the aggregate amount of over $335 million from the proceeds of a title insurance policy (the “Title Insurance Policy”) issued by First American Title Insurance Co. (“First American”).  The policy was issued in the amount of $825 million to the first-lien collateral agent under the Debtors’ prepetition secured credit agreement (the “Collateral Agent” and together with the Debtors, the “Plaintiffs”) for the benefit of the lenders.  To effectuate the proposed plan, the Collateral Agent agreed to assign the Title Insurance Policy’s cash proceeds (not the policy or any claims asserted thereunder) to a trust for the benefit of the claimants. Additionally, the Plaintiffs commenced an adversary proceeding against First American to obtain a determination from the Court that coverage exists under the Title Insurance Policy on account of the mechanics’ lien claims and that the proceeds of the Title Insurance Policy are property of the Debtors’ estates under section 541 of the Bankruptcy Code. Read More ›

Bankruptcy Court Disallows Employee’s Claims for Severance Benefits; Debtor’s Interpretation of Employee Benefit Plan Given Deference

In re The PMI Group, Inc., et al., No. 11-13730 (BLS) (Bankr. D. Del. June 23, 2014)

Judge Shannon recently sustained a debtor’s objection to benefits sought by a former employee pursuant to the debtor’s salary continuation plan (the “Salary Continuation Plan”).  The case centered on whether the implementation of insurer solvency protection provisions under the laws of the state of Arizona constituted a “change in control” as defined by the Salary Continuation Plan.

 
Read More ›

Derivative Standing to Pursue Recharacterization, Equitable Subordination, and Breach of Fiduciary Duty Claims on behalf of Debtors Optim Energy, LLC Denied by Bankruptcy Court

In re Optim Energy, LLC, No. 14-10262 (BLS), 2014 WL 1924908 (Bankr. D.  Del. May 13, 2014)

On May 13, 2014, the Honorable Brendan L. Shannon issued an Opinion denying an unsecured creditor’s request for derivative standing to pursue claims on behalf of debtor Optim Energy, LLC (“Optim Energy”) and its affiliated debtors (collectively, the “Debtors”) for recharacterization, equitable subordination, and breach of fiduciary duties against direct and indirect non-debtor owners, ECJV Holdings, LLC (“ECJV”) and Cascade Investments, L.L.C. (“Cascade”).  Walnut Creek Mining Company (“Walnut Creek”), the Debtors’ largest non-insider general unsecured creditor, alleged that the insiders engaged in a scheme that transformed them from 100% equity holders to senior secured lenders holding claims in excess of $700 million secured by first priority liens on substantially all of the Debtors’ assets. Read More ›