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Delaware Supreme Court holds creditors of insolvent LLCs do not have derivative standing

2012-03-15

CML V, LLC v. Bax, et al., 2011 Del. LEXIS 480 (Del. Sept. 2, 2011)

CASE SNAPSHOT

Affirming the decision of the Court of Chancery for the State of Delaware, the Delaware Supreme Court held that, unlike corporate creditors, creditors of a Delaware Limited Liability Company do not have standing to sue the LLC’s officers derivatively on behalf of an insolvent LLC.

FACTUAL BACKGROUND

Filed under:

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Limited liability company, Standing (law), Balance sheet, Internal control, Derivative suit, Court of Chancery, Delaware Supreme Court, Court of equity

Authors:

Kathleen A. Murphy

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Court finds indirect upstream owner exercised de facto control, warrants liability for WARN Act notice violation

2012-03-15

D’Amico, et al. v. Tweeter Opco, LLC and Schultze Asset Management, LLC (In re Tweeter Opco, LLC), 453 B.R. 534 (Bankr. D. Del. 2011)

CASE SNAPSHOT

Filed under:

USA, Delaware, Employment & Labor, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Worker Adjustment and Retraining Notification Act 1988 (USA)

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‘Substantive rights’ not assignable, intercreditor voting rights assignment nullified

2012-03-15

In re SW Boston Hotel Venture, LLC, 460 B.R. 38 (Bankr. D. Mass. 2011)

CASE SNAPSHOT

Filed under:

USA, Massachusetts, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Condominium, Secured creditor

Authors:

Christopher O. Rivas

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Successor liability – does it survive a Section 363(f) sale?

2012-03-15

This article was first published in The Bankruptcy Strategist

Filed under:

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor

Authors:

Luke A. Sizemore

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Offshore bankruptcy-remote entity is not bankruptcy-proof; trust indenture voting requirement overridden in involuntary bankruptcy case

2012-03-15

Inre Zais Investment Grade Limited VII, 455 B.R. 839 (2011)

CASE SNAPSHOT

Filed under:

USA, Insolvency & Restructuring, Litigation, Securitization & Structured Finance, Reed Smith LLP, Bankruptcy, Debtor, Security (finance), Collateralized debt obligation, Title 11 of the US Code

Authors:

Jeanne S. Lofgren

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Free-and-clear asset sales price must exceed outstanding debt to satisfy section 363(f)(3)

2012-03-15

In re Nance Properties, Inc., Case No. 11-06197- 8-JRL (Bankr. E.D.N.C. Nov. 8, 2011)

CASE SNAPSHOT

Filed under:

USA, North Carolina, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Debt, Secured creditor

Authors:

Joseph D. Filloy

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Corporate synergy among related debtors key to finding conferral of economic benefit in fraudulent transfer action

2012-03-15

Spicer v. Konjoyan (In re Renaissance Hospital, et al.), Adv. No. 10-04190-DML (Bankr. N.D. Texas, Nov. 1, 2011)

CASE SNAPSHOT

Filed under:

USA, Texas, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Fraud

Authors:

Joseph D. Filloy

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‘Indubitable equivalence’ not proven in proposal to effect partial conveyance of property in full satisfaction of claim

2011-12-19

In re SUD Properties, Inc., Case No. 11-03833-8-RDD (Bankr. E.D.N.C. Aug. 23, 2011)

CASE SNAPSHOT

Filed under:

USA, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Debtor, Legal burden of proof

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Secured creditors need not file a proof of claim to lift the automatic stay to proceed with a foreclosure action

2011-12-19

In the Matter of Richard Louis Alexander (7th Cir., 2011) U.S. App. LEXIS 17110, (August 16, 2011)

CASE SNAPSHOT

Filed under:

USA, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Bankruptcy, Debtor, Foreclosure, Secured creditor, United States bankruptcy court, Seventh Circuit

Authors:

Christopher O. Rivas

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Court denies lender’s motion to dismiss Section 547 preference action seeking to avoid valid foreclosure sale

2011-12-19

Whittle Development, Inc. v. Branch Banking & Trust Co. et al. (In re Whittle Development Inc.) 2011 WL 3268398 (Bankr. N.D. Tex., July 27, 2011)

CASE SNAPSHOT

Filed under:

USA, Banking, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Debtor, Foreclosure, Fair market value

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