The Honorable Christopher S. Sontchi, U.S. Bankruptcy Court Judge for the District of Delaware, grants the bankruptcy preference claim defendant’s motion for summary judgment holding that the supply agreement between the debtor and the defendant was both executory and properly assumed and assigned. In the process, the Court rejected the trustee’s claim that the defendant’s refusal to sign a critical vendor agreement implicated a “nefarious intent to avoid preference liability”.
Delaware Bankruptcy Court Limits Section 546(e) in Denial of Citibank’s Motion to Dismiss in Qimonda
District of Delaware Bankruptcy Judge Mary F. Walrath denies motion of Citibank National Association (“Citibank”) to dismiss the bankruptcy preference avoidance complaint for failure to state a claim for relief. In her March 26, 2012 opinion, Judge Walrath holds that Citibank failed to establish that the transfers sought to be avoided were “settlement payments” protected by section 546(e). Distinguishing the recent decision in Official Comm. of Unsecured Creditors of Quebecor World (USA) Inc. v. Am. United Life Ins. Co. (In re Quebecor), 453 B.R. 201 (Bankr. S.D.N.Y. 2011), Judge Walrath finds that the transfers were to “collateralize Citibank’s exposure under a [letter of credit]” issued to secure payment of industrial revenue bonds. Although the transfers to Citibank were used to retire these industrial revenue bonds, the transfers to Citibank were not solely for the purpose of completing a securities transaction but also had the purpose of fulfilling an “obligation independent from any securities transaction”.
Foreign Representative, Liquidator of Fairfield Sentry Limited Files More Bankruptcy Adversary Proceeding Avoidance Claims under BVI Insolvency Act of 2003
Fairfield Sentry Limited and Kenneth Krys, as Foreign Representative and Liquidator (“Fairfield Sentry”) has brought an additional wave of 46 bankruptcy adversary proceedings in the Chapter 15 bankruptcy case of “the largest of all so called ‘feeder funds’ to maintain accounts with [Bernard L. Madoff Investment Securities LLC]”. With the filing of these additional complaints, the total avoidance actions brought by Fairfield Sentry reaches 227. The claims in these proceedings are brought under the laws of the British Virgin Islands (“BVI”). The in the Chapter 15 bankruptcy case of “the largest of all so called ‘feeder funds’ to maintain accounts with [Bernard L. Madoff Investment Securities LLC]”.
Irving H. Picard, Esq. v. Trotanoy Investment Company Ltd. et al – Trustees Memorandum of Law in Opposition to Motions to Dismiss
02/28/2012 – Trustees Memorandum of Law in Opposition to Motions to Dismiss filed in the Madoff Adversary Proceedings by Trotanoy Investment Company Ltd. et al before in the Southern District of New York (Manhattan) filed by Baker & Hostetler LLP (New York, NY) attorneys David J. Sheehan, Deborah H. Renner, Sarah Jane T.C. Truong, Samir K. Ranade, Sammantha E. Clegg, Constantine P. Economides and David Choi.
Irving H. Picard, as trustee (the “Trustee”) for the substantively consolidated liquidation of the business of Bernard L. Madoff Investment Securities LLC (“BLMIS”) and the estate of Bernard L. Madoff (“Madoff”), opposes the motions to dismiss for lack of personal jurisdiction filed by three foreign entities Palmer Fund Management Services Limited (“Palmer”), Hyposwiss Private Bank Genève S.A. (“Hyposwiss”), and Access International Advisors Ltd. (“AIA Ltd.”) (collectively, the “Moving Defendants”). The brief is notable for its use of jurisdictional expanding agency relationship and “mere department” relationship theories – forward, backward and through “commonly-controlled” entities.
Visteon Corporation v. SL Alabama Corporation et al – Brief in Support of Motion to Dismiss
A serious game of motion practice brinksmanship is being played out in a $3 million plus preference proceeding brought by reorganized Visteon Corporation (“Visteon”). Defendant SL Alabama, LLC (“SL Alabama”) makes the first move toward final resolution nearly two months after a default judgment against it was vacated. SL Alabama’s Brief in Support of Motion to Dismiss is noteworthy for two reasons: the brief raises a fundamental legal issue – i.e. proof of service of a summons and complaint; and the facts may cause both defenders and prosecutors of preference actions to update their own practice checklists.
Orleans Homebuilders, Inc. Unsecured Creditor Agent Starts Bankruptcy Preference Adversary Proceedings
On February 16, 2012, J.H. Cohn, LLP, as Unsecured Creditor Agent in the Orleans Homebuilders, Inc. Bankruptcy, commenced mass Chapter 5 preferential transfer recovery litigation in the District of Delaware. The proceedings add insult to injury. Each defendant now knows that the Debtors chose not to invoke the reorganization plan’s “Litigation Protocol” to stop the the avoidance action against it.
Eastman Kodak Company Bankruptcy – 50 Largest Unsecured Creditors
Eastman Kodak Company and 15 associated debtorsFN1 (the “Debtors”) filed voluntary petitions under Chapter 11 of the Bankruptcy Code on January 19, 2012 in the Bankruptcy Court for the Southern District of New York (Case No. 12-10202). The Honorable Allan L. Gropper has been assigned to the case. This initial note provides the Debtors’ consolidated list of their 50 largest unsecured creditors.
Buffets Restaurants Holdings – 40 Largest Unsecured Creditors
Buffets, Inc. and 15 associated debtorsFN1 (the “Debtors”) filed voluntary petitions under Chapter 11 of the Bankruptcy Code on January 18, 2012 in the Bankruptcy Court for the District of Delaware (Case No. 12-10237). The Honorable Mary F. Walrath has been assigned to the case. This initial note provides the Debtors’ consolidated list of their 40 largest unsecured creditors.
ManagedStorage International, Inc. Bankruptcy Preference Adversary Proceedings Filed
On on January 12, 2012 and January 13, 2012, Jeoffrey L. Burtch, Chapter 7 trustee in the ManagedStorage International, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 55 complaints in the District of Delaware.
Anderson News, LLC Bankruptcy Preference Adversary Proceedings
On on December 19, 2011, Anderson News, LLC, as debtor in possession, commenced Chapter 5 preferential transfer recovery litigation against multiple former suppliers in the District of Delaware.