In the latest chapter of the New Century bankruptcy cases, the Court of Appeals for the Third Circuit vacated a district court’s decision on the sufficiency of the debtors’ publication notice and remanded the case back to the district court to determine the critical issue of whether the plaintiff-appellees were known creditors entitled to actual notice. 

“It’s not that I’m afraid to die, I just don’t want to be there when it happens.”  — Woody Allen

Benjamin Franklin is quoted as having said “in this world nothing can be said to be certain, except death and taxes.”  No offense to Mr. Franklin, but we had always thought that there was at least one other certainty in this world—in a bankruptcy case, creditors get paid pursuant to the priority scheme under section 507(a) of the Bankruptcy Code.  It turns out, however, that Mr.

Among the many protections afforded creditors under the Bankruptcy Code is the estate’s ability to avoid transfers made before the petition date that benefit certain creditors at the expense of others. These so-called avoidance actions are primarily governed by Sections 544, 547 and 548 of the Bankruptcy Code, which set forth the requirements for challenging prepetition transfers as preferential or fraudulent.

Section 363(k) of the Bankruptcy Code grants secured creditors the right to credit bid up to the full amount of their claim as a form of currency to bid to purchase assets securing their claim from a debtor in connection with a stand-alone sale of assets under section 363(b). In a recent opinion from the Bankruptcy Court for the District of Delaware, In re Aerogroup International, Inc., Judge Kevin J.

On August 3, 2016, Delaware Trust Company, as trustee for the EFIH first lien notes, filed a petition for certiorari with the United States Supreme Court, asking the Court to review the Energy Future Holding debtors’ settlement with the EFIH first lien noteholders.

The Bankruptcy Court for the District of Delaware recently faced a question of first impression: whether an allowed postpetition administrative expense claim can be used to set off preference liability. In concluding that it can, the court took a closer look at the nature of a preference claim.

Facts and Arguments

The question of what constitutes “equal treatment” is a question as old as law itself. Though a favored topic by the Aristotles and the Rousseaus of the world, the question is not entirely esoteric. The concept plays a central role in the law of bankruptcy – courts occasionally describe the principle of equitable distribution between similarly situated creditors as one of the “pillars” of the Bankruptcy Code.

The power of a debtor or trustee to avoid preferential transfers that benefit certain creditors over others is critical to achieving one of the primary tenets of the Bankruptcy Code – the equality of treatment among all creditors. This ability to recover preferences prevents a debtor from favoring certain creditors over others by transferring property in the time leading up to a bankruptcy filing. Although these preference powers are broad, they are restrained by certain conditions, including a minimum threshold on amounts that can be avoided.

TGIF, right?! Before kick starting your weekend — here’s what you need to know about the recent decision from the United States Court of Appeals for the Third Circuit in the chapter 11 cases of SemCrude L.P. and its debtor affiliates.

FACTS