Recently in the Abengoa SA bankruptcy proceeding (click here to review prior post), the United States Bankruptcy Court for the District of Delaware entered an order permitting Debtors to reject certain nonresidential real property leases (the “Rejection Order”).

Your tenant files for bankruptcy-what’s your move? Debtors who are lessees under real property leases have certain rights regarding their lease under § 365 of the Bankruptcy Code. Essentially, the debtor has two options: 1) reject the lease or 2) assume the lease, provided that the debtor can cure any defaults existing under the lease. Additionally, the debtor may have the right to assume and assign the lease to a third party.

Following up on our coverage in the recent U.S. Supreme Court ruling that a debtor in a Chapter 7 case cannot ‘strip off’ or void a wholly unsecured junior mortgage under section 506(d) of the Bankruptcy Code, I had the opportunity to discuss the ruling with Colin O’Keefe of LXBN TV.

Timely proof of claim filings by secured creditors have “been a thorn in the side of many Chapter 13 cases involving secured creditors,” according to Judge Wood in In re Pajian. However, a recent Seventh Circuit decision may cause the industry to revise their current process for proof of claim filings. Bankruptcy Rule 3002(c) requires creditors to file proofs of claim within 90 days of the date set for the meeting of creditors. Bankruptcy courts have come to conflicting conclusions on whether Rule 3002(c)’s deadline applies to all creditors or merely unsecured ones.

In the case of Coughlin v. South Canaan Cellular Investments, LLC, C.A. No. 7202-VCL (Del. Ch. July 6, 2012), Respondents made a request for fee shifting under the bad-faith exception to the American Rule.  In reviewing this fee shifting request, the Court found that Respondents’ request itself was unfounded, and coupled with Respondents’ own conduct in the case, instead awarded Petitioner his fees in costs in the amount of $17,906.

In the case of Wagamon v. Dolan, C.A. No. 5594-VCG (Del. Ch. Apr. 20, 2012), the Court of Chancery reviewed Defendant William Krieg’s motion for summary judgment pursuant to Court of Chancery Rule 56.  This dispute involves the winding up of a joint venture, Internet Working Technologies, Inc. (“INT”) owned by Allan Wagamon and David B.