Introduction

Most employers know that it is unlawful to terminate the employment of or to discriminate against an individual who has previously filed bankruptcy because of his or her status as a debtor in a bankruptcy proceeding. A recent Federal Court of Appeals decision, however, highlights the distinction between denying employment to an individual based on prior bankruptcy filing and terminating the individual’s employment because of it.

Last month, the Chapter 7 trustee (the "Trustee") in the Viashow bankruptcy filed avoidance actions against several creditors of the bankruptcy estate.  One avoidance action in particular seeks to recover damages allegedly sustained by Viashow due to breaches of fiduciary duties by its officers and directors (the "D&O Action").  In addition to Viashow's officers and directors, the D&O Action seeks damages against defendants who allegedly "aided and abetted" the officers and directors in their breach.  

In re Olde Prairie Block Owner, LLC, Bankr. No. 10B22668 (Bankr. N.D. Ill. March 11, 2011)  

CASE SNAPSHOT

The United States Bankruptcy Court for the District of Delaware recently dismissed equitable subordination and fraudulent transfer claims filed by the Official Committee of Unsecured Creditors of Champion Enterprises, Inc.

Summary

In a 14 page opinion published June 7, 2011, Judge Carey ruled that publication of notice in only two newspapers was insufficient information to grant a motion to dismiss based on adequacy of notice. Judge Carey’s opinion is available here (the “Opinion”).

Background

Lewis Brothers Bakeries Incorporated and Chicago Baking Company v. Interstate Brands Corporation (In re Interstate Bakeries Corporation, et al.), Bk. Case No. 04-45818-11-JWV (W.D. Mo. March 21, 2011)

CASE SNAPSHOT

A recent New York bankruptcy case holds that the Bankruptcy Code's limitations on using avoidance actions to undo securities transactions did not apply where the underlying transactions did not implicate the public securities market. A debtor or bankruptcy trustee has the power and obligation to recover transfers made by the debtor, prior to the commencement of the bankruptcy case, that were either actually or constructively fraudulent. There are, however, certain enumerated limitations to this power.

In re LTAP US, LLLP, Case No. 10-14125 (KG) (Bankr. D. Del. Feb. 18, 2011)

CASE SNAPSHOT

First State Bank of Red Bud v. Official Committee of Unsecured Creditors (In re Schaffer), No. 10-198- GPM, 2011 WL 1118666 (S.D. Ill. March 28, 2011)

CASE SNAPSHOT