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.

The Office of the Director of Corporate Enforcement (ODCE) has published its Annual Report for 2015.

Key Developments from the Report: 

On June 22, 2016, Judge Laurie Selber Silverstein of the Delaware Bankruptcy Court ruled on a motion to for class certification in the PacSun bankruptcy, Case No. 16-10882. In 2011, two plaintiffs filed actions under the California Labor Code Private Attorneys General Act (“PAGA”), alleging violations of California wage and hour laws. One of the Plaintiffs was granted class certification in February, 2016. After PacSun filed for bankruptcy, these plaintiffs moved for authority to file bankruptcy proofs of claim as representatives of the PAGA class for the class.

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 my May 26th post, I raised several questions that unsecured creditors in any Chapter 11 case should know the answers to and take action where appropriate.

This case¹ concerned a challenge to a High Court judgment which was entered against Mr Hanley for failure to repay monies borrowed pursuant to a loan agreement. Mr Hanley asserted that he had never received a letter of demand for repayment of the loan monies borrowed. The Court noted that the notice of demand went, in error, to another Mr Hanley that had no connection to the Defendant.

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

Yet another company in the energy sector has filed for bankruptcy protection. On June 17, 2016, Maxus Energy Corporation, and its affiliates (“Debtors”) filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.

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”).

On June 7, 2016, Judge Laurie Selber Silverstein of the Delaware Bankruptcy Court ruled on a motion to dismiss Diamondhead’s involuntary bankruptcy petition. The Creditors who filed the bankruptcy admitted to the Court that their intent in filing for bankruptcy was to remove management and to obtain a recovery for their equity investments. The “Opinion” is available here. This is the second recent opinion issued in this case.