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Delaware Debtors Bankruptcy Court

DLA Piper

Delaware Bankruptcy Court Clarifies Broad Scope of Fraudulent Transfer Claims

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The US Bankruptcy Court for the District of Delaware recently reaffirmed but limited the holding of In re DSI Renal Holdings, LLC, which held that under Third Circuit law, neither debtors nor trustees could bring fraudulent...more

Cadwalader, Wickersham & Taft LLP

The Impact of In re 301 W N. Ave., LLC on the Enforcement of Bankruptcy-Remote Protections

Executive Summary - The recent decision In re 301 W N. Ave., LLC, 666 B.R. 583 (Bankr. N.D. Ill. 2025) represents a significant development at the intersection of corporate governance, commercial real estate, and...more

Morris James LLP

Chancery Removes an Assignee for Cause in an Assignment for the Benefit of Creditors Proceeding

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In re: Wack Jills, Inc., C.A. No. 2019-0650-PAF (Del. Ch. Aug. 29, 2024) - In this proceeding for the assignment for the benefit of creditors (“ABC proceeding”), the company assigned all of its property and assets to...more

Morris James LLP

Delaware LLCs, Independent Managers, and Bankruptcy Remote Structures: Lessons from 301 W North Avenue

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Overview Limited liability companies (LLCs)—curious creatures of state law—often file bankruptcy. Bankruptcy courts have, therefore, developed a dynamic body of law to evaluate the “bankruptcy remoteness” of LLCs, assessing...more

DLA Piper

Delaware District Court Sheds Light on Standards for Dismissal of Chapter 11 Case Based on Bad Faith

DLA Piper on

On August 28, 2024, Judge Gregory B. Williams of the US District Court for the District of Delaware issued a ruling in AIG Financial Products Corporation, Civ. No. 23-573, affirming an order on appeal from the Delaware...more

Mintz - Bankruptcy & Restructuring Viewpoints

Delaware Bankruptcy Court Grants Derivative Standing to Creditors’ Committee to Sue Members and Officers of Delaware LLC

In early February, a Delaware bankruptcy judge set new precedent by granting a creditors’ committee derivative standing to pursue breach of fiduciary duty claims against a Delaware LLC’s members and officers. At least three...more

Ward and Smith, P.A.

740,000 Reasons to Think Twice Before Putting a Company in Bankruptcy

Ward and Smith, P.A. on

A recent decision from a bankruptcy court in Delaware provides a cautionary tale about the risks of involuntary bankruptcy.  In the Delaware case, the debtor managed a group of investment funds. The business was all but...more

Jones Day

Delaware Bankruptcy Court Imputes Officer's Fraudulent Intent to Corporation in Avoidance Litigation

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A powerful tool afforded to a bankruptcy trustee or a chapter 11 debtor-in-possession ("DIP") is the power to recover pre-bankruptcy transfers that are avoidable under federal bankruptcy law (or sometimes state law) because...more

Ballard Spahr LLP

DE Supreme Court: Creditors’ Fraudulent Transfer Claims Are Direct, Not Derivative

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Delaware’s Supreme Court recently clarified the difference between derivative and direct claims in the context of a dispute over whether creditors’ fraudulent transfer claims were covered by insurance policies applicable to...more

Proskauer Rose LLP

“Free and Clear” Collides with “Perfectly Clear”: Delaware District Court Imposes Successor Liability on Buyer in 363 Sale

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Navigating the Bankruptcy Code can present many traps for unsuspecting debtors, creditors, or asset buyers. The Delaware District Court recently reminded bankruptcy participants of an often overlooked pitfall involving the...more

Patterson Belknap Webb & Tyler LLP

Delaware Court Finds Texas’s Trust Fund Doctrine Lives, but Debtor’s Fiduciary Claims Dead on Arrival

A Delaware bankruptcy court recently held that Texas’s “trust fund doctrine” remains applicable for companies that have not availed themselves of Texas’s formal dissolution process.  Nonetheless, fiduciary claims by a...more

Patterson Belknap Webb & Tyler LLP

Considering the Conduct of Two PPP “Fraudsters,” Bankruptcy Court Shows Its Teeth but Declines to Bite (For Now)

“Messrs. Woods and Wu are fraudsters,” Judge Christopher S. Sontchi declared in the opening salvo of his scathing opinion. According to the former Chief Judge of the U.S. Bankruptcy Court for the District of Delaware, Woods...more

ArentFox Schiff

Creditor Committees of Delaware LLCs Should Take Action to Preserve Derivative Standing

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Recent decisions and court commentary suggest that a creditors’ committee appointed in a Chapter 11 case should take immediate action to ensure that its rights to pursue derivative standing are preserved, particularly when...more

ArentFox Schiff

Third Circuit Favors Cramdown’s ‘Flexibility’ and ‘Rough Justice’ Over Strict Enforcement of Subordination Agreements

ArentFox Schiff on

Eight years after the Delaware bankruptcy court confirmed the chapter 11 plan of Tribune Company and its affiliates, the United States Court of Appeals for the Third Circuit (the Court) affirmed the bankruptcy court’s...more

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