Whether a claim against company management is direct or derivative is not infrequently disputed in litigation before the Delaware Court of Chancery. This determination becomes important in many contexts, including whether it was necessary for plaintiff to make a pre-suit demand upon the board, whether derivative claims of a company have been assigned to a receiver, or whether such claims have previously been settled in a prior litigation.
At the end of my October blog post, Dear Debtor, You Said I was Your First Priority, a VIP!, I suggested that you might want to join a “support group” called the “Official Committee of Unsecured Creditors” (fondly referred to as the OCC or GUCCs), if you felt angry or depressed about your unsecured claim status. Admittedly, I may have led you astray.
Summary
On July 25, 2016, Judge Kevin Carey of the Delaware Bankruptcy Court issued a thorough decision pursuant to a motion for judgment on the pleadings analyzing the intersection of a preference defendant’s post-petition administrative claim and their preference exposure. A copy of the Opinion is available here.
A clash between Netflix and Relativity Media in bankruptcy court has made public some interesting behind-the-scenes business dealings between the two companies, and in the process shed some light on the evolution of Netflix’s business and of online distribution generally.
A recent unpublished decision, Strunck v. Figueroa, serves as a not-so-gentle reminder that sometimes an enforcement application can be “too little, too late,” and that it is imperative to be proactive to protect your rights under a divorce decree or agreement, especially when your adversary acts in bad faith. In Strunck, a 2011 divorce decree awarded the plaintiff $23,369, which was to be transferred from the defendant’s retirement account. Before the plaintiff could act to collect the $23,369, however, the defendant withdrew the money from the retirement account.
The US Bankruptcy Court in Massachusetts says default rates must be justified as a reasonable measure of damages at the time of the making of the loan and that a floating default rate that can exceed 5% will not be allowed as part of a creditors claim in the borrower's bankruptcy. The loan was made in 2006 with a contract rate equal to prime at a time when the prime rate was below 13 percent.
Federal Rule of Bankruptcy Procedure 3003(c)(3) provides that "the [bankruptcy] court shall fix and for cause shown may extend the time within which proofs of claim or interest may be filed." For various reasons, creditors sometimes miss the claims "bar date" and need to seek permission from the court to file a late filed claim or deem the late-filed claim allowed. In order to succeed, the creditor must convince the court that the late claim was the result of excusable neglect. In re Garden Ridge Corp., 348 B.R. 642, 645 (Bankr. D. Del.
Those who were eagerly anticipating the final dénouement on May 15, 2012, in the epic battle between Madoff Trustee Irving Picard and the numerous defendants, constituting the Wilpon-Katz-Mets individual, business, family trust and charitable interests (collectively, the “Wilpons”), will apparently have to wait at least until May 31, 2012. The approval of the final Settlement Agreement by Federal District Judge Jed S. Rakoff, originally scheduled to occur at a hearing on May 15, 2012 at 4 p.m., has been postponed until May 31, 2012 at 4 p.m.