The Delaware Court of Chancery recently issued an opinion in Quadrant Structured Products Company¹that addresses creditors’ rights to bring derivative lawsuits against directors and officers of a corporation.  The Court held that Delaware law does not impose a continuous insolvency requirement and that the “traditional balance sheet test” is the appropriate test for determining solvency.  The opinion also provides a roadmap on the current landscape under Delaware law for analyzing breach of fiduciary duty claims. 

On May 21, 2015, the United States Court of Appeals for the Third Circuit answered the long-asked question of whether structured dismissals are permissible under the Bankruptcy Code with a resounding yes.

This morning, the Supreme Court issued its decision in the much-anticipated Wellness International Network, Ltd. v. Sharif.  And finally, the various opinions of the Court have offered some meaningful guidance on some of the key issues raised in the wake of Stern v.

Another district court has declined to follow the 11^th Circuit’s holding in Crawford v. LVNV Funding LLC.  On a motion for summary judgment, the Western District of Missouri granted summary judgment in favor of LVNV Funding in an adversary proceeding alleging that LVNV’s filing of a time barred proof of claim violated the FDCPA.  Dunaway v. LVNV Funding, LLC, Adv. Pro. No. 14-4132 (W. D. MO.

The United States Supreme Court will hand down its decision in the next few weeks in the case of Wellness Int’l Network, Ltd. v. Sharif (“Wellness”), 727 F.3d 751 (7th Cir. 2013) regarding bankruptcy courts’ jurisdiction.  The jurisdictional quagmire is a major and growing virus in the bankruptcy courts, increasing exponentially the costs of bankruptcy litigation.  Hopefully the Wellness decision will eventually provide a belated prescription on bankruptcy courts’ jurisdiction, and make us all feel just peachy.

A little background:

On May 4, 2015, a unanimous United States Supreme Court in Bullard v. Blue Hills, 135 S. Ct.

On May 4, 2015, the Delaware Court of Chancery issued an important decision regarding creditor standing to  maintain a derivative action on behalf of an insolvent corporation. In Quadrant Structured Products Company v. Vertin et al., C.A. No.

On May 4, 2015, Vice Chancellor Travis Laster of the Delaware Court of Chancery issued a decision in Quadrant Structured Products Co., Ltd. v. Vertin,¹ analyzing creditors’ standing to bring derivative claims against directors and officers of Delaware corporations. Building on the Delaware Supreme Court’s jurisprudence regarding fiduciary duties owed to creditors,²Vice Chancellor Laster’s opinion has two primary holdings.

Can a waiver of rights ever be beneficial to the person granting the waiver?  Yes.  In In re Adamson Apparel, the Court of Appeals for the Ninth Circuit held, in a 2-1 

A bank did not engage in “egregious conduct” sufficient to subordinate its lien on equitable grounds, held the U.S. District Court for the Northern District of Illinois on Dec. 10, 2014. In re Sentinel Management Group, Inc., 2014 WL 6990322 (N.D. Ill. Dec. 10, 2014) (“Sentinel IV”). Moreover, because of the bank’s “good faith,” the corrupt borrower’s fraudulent pledging of customer funds to the bank to secure a so-called $312-million rescue loan “cannot be avoided.” Id. at *10.