The Third Circuit overrules a long-standing case, changing the ability of personal injury plaintiffs to bring suit against debtors

JELD-WEN, Inc v Van Brunt (In re Grossman’s Inc), (3d Cir No 09-1563, June 2, 2010)

CASE SNAPSHOT

Filed under:
USA, Insolvency & Restructuring, Litigation, Product Regulation & Liability, Reed Smith LLP, Bankruptcy, Debtor, Statutory interpretation, Due process, Liquidation, Precondition, Bankruptcy discharge, Title 11 of the US Code, United States bankruptcy court, Third Circuit
Authors:
Jennifer P. Knox
Location:
USA
Firm:
Reed Smith LLP
Delaware Bankruptcy Court finds appointment of examiner not required every time the statutory debt threshold is exceeded

In re Spansion, Inc, 426 BR 114 (Bankr Del April 1, 2010)

CASE SNAPSHOT

Filed under:
USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Unsecured debt, Fraud, Interest, Misconduct, Discovery, Debt, Vacated judgment, Misrepresentation, Title 11 of the US Code, United States bankruptcy court
Authors:
Elizabeth A. McGovern
Location:
USA
Firm:
Reed Smith LLP
The Third Circuit expands the substantial-performance test to determine if a trademark license contract is executory

In re Exide Technologies, 607 F3d 957 (3rd Cir June 1, 2010)

CASE SNAPSHOT

Filed under:
USA, Insolvency & Restructuring, Litigation, Trademarks, Reed Smith LLP, Bankruptcy, Debtor, Breach of contract, Employment contract, Second Circuit, United States bankruptcy court, Third Circuit
Authors:
Christopher O. Rivas
Location:
USA
Firm:
Reed Smith LLP
Defense of imputation of an agent’s bad conduct to its principal clarified in Pennsylvania; independent auditor at risk for $1 billion in damages

Official Committee of Unsecured Creditors of Allegheny Health, Education and Research Foundation v PricewaterhouseCoopers, LLP(3d Cir No 07-1397, May 28, 2010)

CASE SNAPSHOT

Filed under:
USA, Pennsylvania, Insolvency & Restructuring, Litigation, Non-profit Organizations, Professional Negligence, Reed Smith LLP, Breach of contract, Fraud, Fiduciary, Audit, Negligence, Remand (court procedure), Collusion, Chief financial officer, Pennsylvania Supreme Court
Authors:
Ann E. Pille
Location:
USA
Firm:
Reed Smith LLP
Sellers beware - unauthorized payments from ‘cash collateral’ will be avoided

Suppliers to chapter 11 debtors-in-possession should always ensure that they are not being paid from the debtor’s “cash collateral” without court approval. Marathon Petroleum Company supplied products to debtor Delco Oil in the ordinary course of its business during the bankruptcy case, but was forced to return all of the postpetition payments it received from Delco, pursuant to section 549 of the Bankruptcy Code. Marathon was required to return these payments because they were deemed part of the cash collateral that was secured by Delco’s pre-petition creditor, CapitalSource Finance.

Filed under:
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Collateral (finance), Secured loan, Title 11 of the US Code, Uniform Commercial Code (USA), Trustee, United States bankruptcy court
Authors:
Christopher O. Rivas
Location:
USA
Firm:
Reed Smith LLP
An LLC member/manager is an ‘insider,’ so that payments are preferential transfers subject to avoidance up to one year prior to bankruptcy filing

Longview Aluminum, LLC v Brandt (In re Longview Aluminum, LLC), 2010 WL 2635787 (ND Ill, June 28, 2010)

CASE SNAPSHOT

Filed under:
USA, Illinois, Company & Commercial, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Board of directors, Limited liability company, Consent, Title 11 of the US Code, Trustee, United States bankruptcy court, Seventh Circuit
Authors:
Ann E. Pille
Location:
USA
Firm:
Reed Smith LLP
Landlord’s corner

In this edition of the Landlord’s Corner, we review various cases that address the (i) rights of landlords to recover their property post-rejection, (ii) whether payments pursuant to a termination of lease agreement constitute preferential transfers and (iii) whether a lease could be retroactively rejected in the absence of a formal motion to reject.

Filed under:
USA, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Bankruptcy, Debtor, Landlord, Westlaw, Title 11 of the US Code, Trustee, United States bankruptcy court, First Circuit
Authors:
Derek J. Baker
Location:
USA
Firm:
Reed Smith LLP
Court breaks from majority rule, granting retirees post-petition rights greater than pre-petition rights

IUE-CWA v Visteon Corporation, 2010 WL 2735715 (3rd Cir July 13, 2010)

CASE SNAPSHOT

Filed under:
USA, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Life insurance, Good faith, Collective bargaining agreements, Majority opinion, US Congress, Communications Workers of America, Trustee, Second Circuit, United States bankruptcy court, Third Circuit
Authors:
Christopher O. Rivas
Location:
USA
Firm:
Reed Smith LLP
Broader economic woes may have played a part in the court’s decision to dismiss allegations of lender overreaching

American Consolidated Transportation Companies, Inc v RBS Citizens NA (In re American Consolidated Transportation Companies, Inc), Adversary No 10-00154, Bankruptcy No 09-26062 (Bankr ND Ill July 13, 2010)

CASE SNAPSHOT

Filed under:
USA, Illinois, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Letter of credit, Credit (finance), Debtor, Interest, Swap (finance), Liquidation, Good faith, Cashflow, Default (finance), Secured loan, The Royal Bank of Scotland, United States bankruptcy court
Authors:
Brian M. Schenker
Location:
USA
Firm:
Reed Smith LLP
Risk losing your first priority lien if you provide superfluous information in the UCC financing statement

In re EDM Corporation, 2010 WL 1929772 (8th Cir BAP May 14, 2010)

CASE SNAPSHOT

Filed under:
USA, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Collateral (finance), Safe harbor (law), Uniform Commercial Code (USA), Bankruptcy Appellate Panel
Authors:
Cory Falgowski
Location:
USA
Firm:
Reed Smith LLP