The Bankruptcy Court for the District of Delaware recently faced a question of first impression: whether an allowed postpetition administrative expense claim can be used to set off preference liability. In concluding that it can, the court took a closer look at the nature of a preference claim.
Facts and Arguments
On August 4, 2016, the Delaware Bankruptcy Court considered cross-motions for summary judgment in a preference action case styled as Pirinate Consulting Group, LLC v. Maryland Department of the Environment (In re NewPage Corp.), Adv. Pro. No. 13-52206 (KG). This gem of an opinion is noteworthy in that it analyzes various defenses raised by a state agency to a preference complaint.
Key Points
In the November/December 2014 edition of the Business Restructuring Review, we discussed a decision handed down by the U.S. District Court for the District of Delaware addressing the meaning of “unreasonably small capital” in the context of constructively fraudulent transfer avoidance litigation. In Whyte ex rel. SemGroup Litig. Trust v.
The U.S. Supreme Court has handed down two rulings thus far in 2016 (October 2015 Term) involving issues of bankruptcy law. In the first, Husky Int’l Elecs., Inc. v. Ritz, 194 L. Ed. 2d 655, 2016 BL 154812 (2016), the Court addressed the scope of section 523(a)(2)(A) of the Bankruptcy Code, which bars the discharge of any debt of an individual debtor for money, property, services, or credit to the extent obtained by "false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition."
(6th Cir. B.A.P. Aug. 4, 2016)
A district court in Nevada recently granted a mortgage company’s motion to dismiss FCRA claims where the reported debt had been discharged in bankruptcy.The opinion serves as a reminder of the rules governing the reporting of discharged debt.In Riekki v. Bayview Fin. Loan Servicing, the consumer alleged that the subject debt was discharged pursuant to his Chapter 13 bankruptcy and that the creditor continued to report balances through the pendency of the bankruptcy as well as post-petition.Riekki v. Bayview Financial Loan Servicing, 2:15-cv-2427, 2016 U.S. Dist.
A recent decision by the Bankruptcy Court for the District of Delaware in PAH Litigation Trust v. Water Street Healthcare Partners L.P. (In re Physiotherapy Holdings, Inc.), Case No. 13-12965 (KG) (Bankr. D. Del. June 20, 2016), may limit the types of transactions that are subject to the “safe harbor” protections of section 546(e) of the Bankruptcy Code.
CLIENT PUBLICATION FINANCIAL RESTRUCTURING & INSOLVENCY | August 9, 2016 Not So Safe After All?
“Just when I thought I was out…they pull me back in.” That must be what GM’s executives (and counsel) were thinking when the Second Circuit handed down its recent decision overturning portions of the 2015 Bankruptcy Court decision that could have immunized the “New GM” from “Old GM’s” liability related to the ignition switch recall of 2014. The decision also calls into question the 2009 sale order as a potential violation of the victims’ due process rights.