On July 18, 2016, Judge Walrath issued a concise written opinion ruling upon whether an executive’s claim for unpaid stock-based compensation was an equity security or rather a general unsecured claim against the Debtors’ estate. The opinion is styled as GSE Environmental, Inc., et al. v. Sorrentino (In re GSE Environmental, Inc., et al.), Adv. Pro. No. 16-50377 (MFW) (Bankr. D. Del.

On July 1, 2016, Gold Alchemy LLC filed for Chapter 7 bankruptcy protection with the U.S. Bankruptcy Court for the District of Delaware. According to the petition, the debtor’s estimated assets are $10 to 50 million, and estimated liabilities are $50 to 100 million.

Alchemy is a distribution company formerly known as Millennium Entertainment. According to Deadline Hollywood:

On July 1, 2016, SynCardia Systems, Inc. (“Debtor” or “SynCardia”) filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware.

According to the Declaration of Stephen Marotta, the Debtor’s Chief Restructuring Officer, SynCardia is a medical technology company that develops artificial heart implants. In the months leading to the Debtor’s filing, SynCardia attempted but then withdrew an IPO attempt due to adverse market conditions. Since then it has become insolvent.

On June 16, 2016, the Official Committee of Unsecured Creditors (the “Committee”) of Kid Brands Inc., et al. (the “Debtors”), filed approximately 64 complaints seeking the avoidance and recovery of allegedly preferential and fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. The Committee also seeks to disallow claims of such preference defendants under Sections 502(d) and (j) of the Bankruptcy Code.

In the recent decision of Gavin Salmonese, LLC v. Shyamsundar, et al. (In re AmCad Holdings, LLC, et al.) (Bankr. D. Del.

It is relatively rare when a Circuit Court issues an opinion on the preference defenses under section 547(c) of the Bankruptcy Code. It is even more unusual when a decision examines the fact-focused “ordinary course” defense under section 547(c)(2). The ordinary course defense shields payments determined to have been made in the “ordinary course of business” of both the debtor and the creditor.

Delaware has long established itself as a welcoming jurisdiction for various legal purposes. It began as a center for company incorporation by providing a corporate law framework that was flexible and continuously updated for new developments. More recently, Delaware has applied those same principles (plus an expansive view of venue) to become a center for major chapter 11 reorganization filings.

Recently on June 6, 2016, the Delaware Bankruptcy Court considered a motion to dismiss the Intervention Energy Holdings, LLC, et al. bankruptcy proceeding. On May 20, 2016, Intervention Energy Holding, LLC (“IE Holdings”) and Intervention Energy, LLC (“IE”) filed a voluntary chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Delaware (the “Voluntary Petition”).

In 2015, the Court of Chancery ruled upon the then novel issue under Delaware law as to what priority level advancement claims should be afforded in a receivership action. Then Vice Chancellor Parsons held that claims for advancement are not entitled to administrative priority, and instead are considered to be pre-petition, non-priority unsecured claims. For a link to a summary of the Court of Chancery decision, click here.

On June 5th and 6th, 2016, Houston-based energy firm Hercules Offshore Inc. and its affiliated debtors (“Hercules” or “Debtors”) filed for Chapter 11 bankruptcy protection before the United States Bankruptcy Court for the District of Delaware.