Summary

In an 11 page opinion published June 14, 2011, Judge Walrath ruled that a Chapter 7 Trustee’s lack of specificity in pleading a preference action was grounds for dismissal under FRCP 12(b)(6). Judge Walrath’s opinion is available here (the “Opinion”).

Background

In a decision that may have significant practical implications to the practice of bankruptcy law, the U.S. Supreme Court recently declared, on constitutional grounds, that a bankruptcy court cannot exercise jurisdiction over a debtor’s state law counterclaims, thus considerably limiting the ability of the bankruptcy court to fully and finally adjudicate claims in a bankruptcy case. Stern v. Marshall, No. 10-179 (June 23, 2011).

Unless you’re not a sports fan or simply don’t follow Major League Baseball (MLB), you probably know that the Los Angeles Dodgers filed a chapter 11 bankruptcy petition on Monday, June 27, 2011. (Delaware Bankruptcy Court, Case Number 11-12010.) According to Forbes magazine, the Dodgers are one of the most valuable baseball franchises in America. Nevertheless, the franchise hit hard times and filed for bankruptcy.

Recently, Corinthian Colleges, Inc., one of the United States' largest for-profit educational conglomerations with 72,000 students across 107 campuses, filed (along with 25 affiliated subsidiaries) a chapter 11 voluntary petition for bankruptcy protection. Corinthian reported $19.2 million of total assets and US$143.1 million of total debts, and plans to liquidate.

Introduction

Nothing says “closure” quite like a termination agreement reaffirmed by a bankruptcy court – right?

Jackie Ford, partner in the Vorys Houston and Columbus offices, authored an article for Law360 onwhether traditional definitions of property and ownership include social media accounts. The full text of the article is included below.

WHO OWNS LIKES, POSTS, PAGES AND TWEETS IN BANKRUPTCY?

Congress rarely accomplishes anything these days, but the need to reform Chapter 11 of the Bankruptcy Code seems to have “crossed over the aisle.” When the Bankruptcy Code was enacted in 1978, America boasted the world’s dominant manufacturing economy. Corporate debt was mostly unsecured trade debt. Secured loans provided tangible asset financing for property, plant, and equipment.

Two recent decisions from large and highly contested chapter 11 cases add to the developing body of case law on the treatment of make-whole claims in bankruptcy.  First, in a two-part post, we discuss the United States Bankruptcy Court for the District of Delaware’s decision in Energy Future Holdings, and later, in a follow-up post, we discuss the United States District Court for the Southern District of

Rule 2004 Examination in Bankruptcy