(Bankr. E.D. Ky. June 23, 2016)
The bankruptcy court applies Kentucky’s borrowing statute, KRS § 413.320, to determine the applicable statute of limitations for the debtor’s defamation, breach of contract, and fraud claims. The court analyzes where each claim accrued and dismisses some but not all of the debtor’s claims. Opinion below.
Judge: Wise
Attorney for Debtor: Dann Law Firm, Brian D. Flick
Attorney for Defendants: Christopher M. Hill, John R. Wirthlin, Frost Brown Todd LLC, Patricia K. Burgess, Stephanie Smiley
(7th Cir. June 23, 2016)
The Seventh Circuit reverses the bankruptcy court, concluding that the bankruptcy code permits modification of a confirmed Chapter 13 plan based on increased income post-confirmation. While the code does not expressly permit modification on this basis, other courts have permitted this. The trustee had filed a motion to increase the debtors’ plan payments based on an alleged $50,000 post-confirmation increase in the debtors’ annual income. Opinion below.
Judge: Adelman
Attorney for Debtor: Eugene Wedoff
In recent years, constructively fraudulent transfer claims asserted in bankruptcy cases, especially those arising from LBOs and similar shareholder transactions, have hit a major road block.
The U.S. Bankruptcy Court for the District of Delaware recently issued an opinion that addresses, among other issues, the question of whether section 546(e) of the Bankruptcy Code preempts certain fraudulent transfer avoidance actions brought under state law. In re Physiotherapy Holdings Inc., No. 15-51238 (Bankr. D. Del. June 20, 2016).
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.
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.
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.
Businesses need to have written protocols in place to deal with bankruptcy filings by their employees and independent contractors, or they risk serious sanctions and, potentially, punitive damages for violations of the bankruptcy laws. Consider two examples.
Earlier this month, Judge Sontchi dismissed an intercreditor adversary complaint filed in 2014 by the Energy Future Holdings (“EFH”) first-lien trustee against the second-lien noteholders. At issue in this decision, Delaware Trust Co. v. Computershare Trust Co.
(E.D. Ky. Bankr. June 24, 2016)
In this Chapter 13, the bankruptcy court rules on the objection to confirmation and finds that the creditor’s expert’s valuation of the debtor’s mobile home was more reliable than the valuations provided by the debtor’s experts. The creditor’s expert testimony was not hearsay, as it was reasonable for the expert to rely on information about the particular mobile home model provided by the manufacturer. The debtor’s experts failed to obtain knowledge of the particular model before determining their values. Opinion below.
Judge: Schaaf
A recent decision from the Bankruptcy Court for the District of Delaware further puts into doubt so-called bankruptcy blocking tactics. And the opinion from In re Intervention Energy Holdings, LLC, No. 16-11247, 2016 Bankr. LEXIS 2241 (Bankr. D. Del.