On December 17, the United States Bankruptcy Court for the District of Delaware approved a settlement between Starion Energy Inc. and the Commonwealth of Massachusetts in which Starion agreed to pay up to $10 million to resolve claims that it engaged in deceptive business practices and violated state telemarketing laws.
Starion is a retail provider of electricity and natural gas that offers service to residential and commercial customers in states where energy deregulation permits customers to choose their supplier.
While section 503(b)(9) claims deserve priority payment over general unsecured claims, they do not provide a basis for stripping a debtor’s defenses in determining the allowed amount of a section 503(b)(9) claim.
Note: Pepper Hamilton LLP serves as co-counsel to the Official Committee of Unsecured Creditors (the Committee) in the ADI case. The views expressed herein are solely those of the authors and not of the Committee.
In In reAm. Capital Equip., LLC1 the Third Circuit addressed the issue of whether a bankruptcy court has the authority to determine at the disclosure statement stage that a Chapter 11 plan is unconfirmable without holding a confirmation hearing. The court held that when a plan is patently unconfirmable, so that no dispute of material fact remains and defects cannot be cured by creditor voting, a bankruptcy court is authorized to convert the case to Chapter 7 without holding a confirmation hearing. Am.
Creditors and debt collectors are often held to high standards when it comes to consumer protection laws. On December 17, however, the United States Bankruptcy Court for the Northern District of Illinois issued a Memorandum Opinion in In re: Charles V. Cook, Sr., No. 1:14-bk-36424, evincing that debtors’ counsel can be subject to similarly high standards when appropriate.
Parties to all legal proceedings - including bankruptcy proceedings - are entitled to Constitutionally protected due process rights, including reasonable notice and an opportunity to be heard. In the bankruptcy context, the debtor must give known creditors reasonable notice of certain critical events, including the sale of the debtor’s assets and the deadline to file claims against the debtor.
In a unanimous decision, the U.S. Supreme Court held that debtors may not obtain confirmation of a Chapter 11 cramdown plan that provides for the sale of collateral free and clear of a creditor’s lien but does not permit the creditor to credit-bid at the sale. InRadlax Gateway Hotel, LLC et al. v.
View original on Law360: https://www.law360.com/articles/1173110/the-upside-of-the-fastest-chapter-11-confirmation-ever
Morris v. Ark Valley Credit Union (In re Gracy), 522 B.R. 686 (Bankr. D. Kan. 2015) –
A chapter 7 trustee sought to avoid a credit union’s security interest in a manufactured home by asserting his strong arm powers as a hypothetical lien creditor based on the lender’s failure to perfect its lien. The bankruptcy court declined to avoid the lien since it held there was no lien to avoid.
Back in the mists of time, a seller that had a valid reclamation claim but was denied the return of its goods was entitled to an administrative expense claim (a claim with a higher priority than a general unsecured claim and thus a better chance of getting paid) or a lien on the debtor’s assets. The 2005 amendment to § 546(c) of the Bankruptcy Code changed all that by stripping away those alternative remedies.