Summary

In a 10 page decision signed May 5, 2011, Judge Walsh of the Delaware Bankruptcy Court denied a motion to dismiss and held that the plaintiff Litigation Trustee satisfied the “particularity” requirements of Federal Rules of Civil Procedure 12(b)(6) and 9(b), despite having his complaint allege that each transfer within a 13 page list of transfers was fraudulent. Judge Walsh’s opinion is available here (the “Opinion”).

Introduction

In January of this year, George L Miller, the chapter 7 trustee (the "Trustee") in the WL Homes bankruptcy, began filing avoidance actions against various creditors. As alleged in the complaints, the Trustee seeks the recovery of what he deems are "preferential transfers" pursuant to 11 U.S.C. section 547(b) of the Bankruptcy Code. This post will look briefly at the WL Homes bankruptcy, as well as provide information on common issues that arise in preference litigation.

Background on the Bankruptcy Proceeding

On October 12, 2010, Consolidated Horticulture Group, LLC and Hines Nursery LLC (the "Debtors"), filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to the Declaration filed by Debtors' President and CEO, Stephen Thigpen (the "Declaration"), Debtors are one of the largest commercial nurseries in North America, selling shrubs and container-grown plants to commercial and retail customers. Decl.

Introduction

Regent Communications, a radio broadcasting company that operates 62 stations throughout the U.S., filed chapter 11 bankruptcy petitions in the Delaware Bankruptcy Court on March 1, 2010.

On May 23, 2017, Don A. Beskrone, the chapter 7 trustee for the estate of PennySaver USA Publishing, LLC filed preference actions against 46 defendants. PennySaver was an iconic company that specialized in the production, printing, and dissemination of a free weekly publication, offering coupons and classified ads to targeted audiences.

ATopTech, Inc. (“ATopTech” or “Debtor”), an electronic design automation software company manufacturing software solutions for engineers to assist them in the physical design of integrated circuits, filed a voluntary petition for chapter 11 bankruptcy relief on January 13, 2017 in the United States Bankruptcy Court for the District of Delaware.

In addition, ATopTech filed a motion to sell its businesses under section 363 of the Bankruptcy Code and has selected a stalking horse bidder. The Debtor expects that the sale will be completed by March 31, 2017.

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. One of those questions is “Am I entitled to priority payment?” This is also important to answer in a Chapter 7 case.

On August 9, 2016, Judge Kevin Carey of the Delaware Bankruptcy Court issued an Order both dismissing a complaint and striking a defendant’s Notice of Supplemental Authority. The decision was issued in the Quantum Foods bankruptcy, in the adversary proceeding No. 16-50045. A copy of the Opinion is available here.

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.