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District Court Bars Assignment by Sears, Provision in Lease Cannot Supersede §365(b)(3)(A)

The Bottom Line

USA, New York, Insolvency & Restructuring, Litigation, Real Estate, Kramer Levin Naftalis & Frankel LLP, Title 11 of the US Code, US District Court for the Southern District of New York
Court Holds Filing of Proof of Claim Results in Waiver of Right to Jury Trial Despite Claimants’ Purported Reservation of Rights

The Bottom Line

In an opinion dated Jan. 10, 2020, Bankruptcy Judge Craig A. Gargotta of the Western District of Texas (San Antonio Division) held that a creditor who submits a proof of claim in bankruptcy waives its right to a jury trial, regardless of whether the creditor has couched its claim in protective language purporting to reserve its right to a jury trial. See Schmidt v. AAF Players LLC (In re Legendary Field Exhibitions LLC), 19-05053 (Bankr. W.D. Tex. Jan. 10, 2020).

What Happened?

Background

USA, Texas, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Supreme Court of the United States, United States bankruptcy court
Fifth Circuit Affirms Bar Orders in Receivership, Bars Creditors From Pursuing Claims Against Settling Defendants

The Bottom Line

USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, US Securities and Exchange Commission
Limits on Creditors’ Remedies Against Solvent Debtors Echoed in the Quadrant Litigation

In a three-line order, the Delaware Supreme Court recently affirmed the Court of Chancery’s dismissal of a suit by a creditor against Athilon Capital Corp. and its sole shareholder, Merced Capital Partners, arising from claims of self-interested transactions by Merced. Quadrant Structured Products Company, Ltd. v. Vertin serves as a reminder of the limited recourse of creditors against controlling shareholders of a debtor that is solvent, even in the cases of egregious conduct.

The Facts

USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Shareholder