(Bankr. E.D. Ky. June 29, 2017)

The bankruptcy court grants the defendants’ motion to dismiss in this adversary proceeding. The trustee sought to subordinate and recharacterize defendants’ claims under 11 U.S.C. § 510, avoid as fraudulent and preferential transfers certain transfers to the defendants, and disallow defendants’ claims. The court finds that the trustee fails to allege facts sufficient to support any of the claims. Opinion below.

Judge: Wise

(S.D. Ind. June 27, 2017)

(Bankr. S.D. Ind. June 26, 2017)

The bankruptcy court dismisses without prejudice the debtor’s complaint against a foreclosing creditor because the court concludes it lacks subject matter jurisdiction. The debtor filed the complaint alleging numerous causes of action, including violations of the automatic stay. However, the alleged acts occurred at a time when the subject property was no longer property of the estate. Opinion below.

Judge: Carr

Attorneys for Debtor: Sabin, Shea & Des Jardines LLC, J. Andrew Sabin

(Bankr. E.D. Ky. June 21, 2017)

The bankruptcy court grants the defendant’s motion to dismiss the trustee’s complaint, which sought to avoid transfers from debtors to the defendant. The complaint failed to state a claim, in part because the defendant could not be deemed an “insider” of the debtor. The court additionally finds that the complaint contains insufficient facts to support various other claims. Opinion below.

Judge: Wise

Attorneys for Trustee: Bingham Greenbaum Doll LLP, Claude R. Bowles, Jr., Daniel J. Donnellon, James R. Irving, April A. Wimberg

(B.A.P. 6th Cir. June 20, 2017)

All Australian states have sale of goods legislation that, in certain circumstances, allows an unpaid seller to retain possession of goods in transit where the buyer becomes insolvent. The statutory right, called stoppage intransitu, is a useful remedy to obtain payment.

A registered security interest on the PPSR is not required to exercise the statutory right. Administrators and liquidators may be trumped by a notice under the stoppage in transitu provisions.

However, the sale of goods legislation is not identical in each state.

(S.D. Ind. June 2, 2017)

Competing claims to goods are common where there is an unpaid seller with alleged retention of title, the supplier’s customer has gone into external administration and the goods are in the possession of a transport or warehouse provider. Thrown into the mix may be an administrator or liquidator demanding possession of the goods to sell them.

The recent case of M Webster Holdings Pty Limited (administrators appointed) v Specific Freight Pty Limited [2017] FCA 269 illustrates how a transport provider can become ‘the meat in the sandwich’ when a consignee of goods becomes insolvent.

Webster, a fashion retailer, operated two well-known Australian businesses, David Lawrence and Marcs. Webster was placed into administration in February 2017 and its administrators continued to trade with a view to securing a purchaser.

(6th Cir. B.A.P. May 18, 2017)