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Showing 6 posts in Administrative Expense Claims.

Committee Professionals’ Carve-Out in DIP Financing Order Not Per Se Limit on Fees

In re Molycorp, Inc., No. 15-11357(CSS), 2017 WL 56703 (Bankr. D. Del. Jan. 5, 2017)

In this Opinion, Judge Sontchi found, among other things, that an unambiguous carve-out provision of a debtor-in-possession financing order (the “DIP Financing Order”) did not cap the professional fees and expenses of the Official Committee of Unsecured Creditors (the “Committee”) given that a plan of reorganization was confirmed.  Moreover, because the Committee’s professional did not agree to different treatment, its fees and expenses were administrative expenses that must be paid in full. Read More ›

Set Off of Administrative Claim Against Preference Liability is Permissible and Not a “Disguised New Value Defense”

Official Comm. of Unsecured Creditors of Quantum Foods, LLC v. Tyson Foods, Inc. (In re Quantum Foods, LLC), No. 15-50254 (KJC), 2016 WL 4011727 (Bankr. D. Del. July 25, 2016)

In this Opinion, the Delaware Bankruptcy Court addressed a question that remained in the wake of the Third Circuit’s Opinion in Friedman’s: although post-petition goods and services may not be counted as subsequent new value under section 547(c)(4) of the Bankruptcy Code, may they still be used to offset alleged preference liability?  See Friedman’s Liquidating Tr. v. Roth Staffing Co., LP (In re Friedman’s Inc.), 738 F.3d 547 (3d Cir. 2013).  In answering this question of first impression, the Court ruled that they may.  In its holding, the Court also confirmed earlier rulings that section 502(d) may not be used to disallow administrative claims. 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 ›

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 ›

Motion for Reconsideration Denied: Bankruptcy Court Correctly Interpreted Lease

In re Filene's Basement, et al., No. 11-13511 (KJC) (Bankr. D. Del. Jan. 15, 2014)

In this Memorandum Opinion, the Honorable Kevin J. Carey denied the debtor Syms Corp.'s motion for reconsideration of a ruling where he previously held that an amendment to a credit agreement providing for a $10 million working capital loan secured by a leasehold mortgage constituted a "permanent mortgage" under the terms of the lease.  Read More ›

Claimant Not Considered an "Employee" of the Debtor, Denied Administrative Claim for Severance

In re World Health Alternatives, Inc. et al., No. 06-10166 (PJW) (Bankr. D. Del. Jan. 14, 2014)

Despite a claimant's assertion that he was entitled to an administrative expense claim against debtor World Health Alternatives, Inc. ("World Health") for severance, the Court found, in this short letter ruling, that the evidence did not support such a claim. Read More ›