On March 9, 2012, Susheel Kirpalani, the court-appointed examiner for Dynegy Holdings LLC (Dynegy), concluded that the debtor's transfer of certain assets to its parent company, Dynegy Inc., prior to its bankruptcy filing may be recoverable as a fraudulent transfer. Kirpalani further determined that Dynegy's board of directors breached its fiduciary duty in approving the asset transfer. Dynegy Inc. vigorously disputes the examiner's findings.
On 29 February 2012, the UK Supreme Court handed down its judgment concerning the treatment of client money in the long-running administration of Lehman Brothers International (Europe) (“LBIE”).
If you are one of the lucky product manufacturers who weathered the recent economic downturn well and are looking to buy assets from those who did not survive…beware!
InYessenow v. Executive Risk Indemnity, Inc., 2011 IL App 102920, 953 N.E.2d. 433 (1st Dist.
Opposing lawyers for Jefferson County, the debtor in the largest Chapter 9 municipal bankruptcy case ever filed, and the holders of its sewer warrants squared off last week in the ongoing fight over control of the County’s sewer system and the right to its revenues. (Expert witness
On March 26, 2012, Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware refused to rule that, as a matter of law, payments made to satisfy a debtor’s obligations under a letter of credit constitute “settlement payments” protected from avoidance under section 546(e) of the Bankruptcy Code. EPLG I, LLC v. Citibank, National Association et al. (In re Qimonda Richmond, LLC, et al.), No. 09-10589, 2012 Bankr. LEXIS 1264 (Bankr.
In this appeal, the Delaware Supreme Court affirmed an interim fee award of $2.5 million to plaintiff’s attorneys, which the Court of Chancery granted following its decision in Kurz v. Holbrook, 989 A.2d 140 (Del. Ch. 2010), and the Delaware Supreme Court’s decision on appeal in Crown EMAK Partners, LLC v. Kurz, 992 A.2d 377 (Del.
In Jagodzinski v. Silicon Valley Innovation Co., No. 6203, Slip Op. (Del. Ch. Feb.
A new decision from a New York federal district court highlights certain risks faced by persons buying assets out of bankruptcy. Buyers may be subject to successor liability based on the seller's conduct before the bankruptcy if no injury was caused until after the bankruptcy sale. Buyers of bankruptcy assets will need to do additional diligence to ensure that they are not unwittingly acquiring hidden liabilities.
It has long been understood by buyers of assets of distressed companies that once a sale is authorized pursuant to Section 363 of the Bankruptcy Code, the buyer is absolved of any liabilities which may have encumbered the assets of the previous owner, including causes of actions against them. However, a recent decision from the influential United States District Court for the Southern District of New York saddles buyers with the burden of unknown potential future claims.