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.

Last week, the bankruptcy estate of Orleans Homebuilders filed over 250 complaints to recover alleged preferential transfers (see our previous post on the Orleans bankruptcy here, as well as a post on bankruptcy preference actions here).

Introduction

Introduction

Last month, the Chapter 7 trustee (the "Trustee") in the Viashow bankruptcy filed avoidance actions against several creditors of the bankruptcy estate.  One avoidance action in particular seeks to recover damages allegedly sustained by Viashow due to breaches of fiduciary duties by its officers and directors (the "D&O Action").  In addition to Viashow's officers and directors, the D&O Action seeks damages against defendants who allegedly "aided and abetted" the officers and directors in their breach.  

Summary

In a 15 page decision signed yesterday, April 5, 2011, Judge Sontchi of the Delaware Bankruptcy Court determined that when a company receives pleadings in a bankruptcy case, even if served on their “doing business as” name, they have received proper service. Judge Sontchi’s opinion is available here.

Background

On October 31, 2010, Wolverine Tube, Inc. ("Wolverine") filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to the Declaration of Wolverine's President in Support of Debtors' Petitions (the "Declaration"), the company's bankruptcy filing resulted from several factors, most notably a drop in cash due to volatility in commodity prices and high debt obligations. See Declaration at pp. 2-3.

Recently, the Chapter 7 Trustee (the "Trustee") in the HRP Myrtle Beach Holdings bankruptcy, filed several avoidance actions pursuant to sections 547, 548, and 549 of the Bankruptcy Code. The avoidance actions, filed in the United States Bankruptcy Court for the District of Delaware, are before the Honorable Kevin J. Carey, Chief Judge of the Delaware Bankruptcy Court.