On April 15, 2016, the Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) halted the attempt of plaintiffs who were injured in an accident involving a General Motors vehicle to seek recourse against General Motors LLC (“New GM”) in state court, finding that New GM did not assume liability for the plaintiffs’ claims.  This decision provides yet another reminder to t

Does the bankruptcy filing of a limited liability company without the approval of its “Special Member,” the secured lender serving as “blocking director,” render that filing infirm as unauthorized and subject to dismissal?  Not necessarily, held the United States Bankruptcy Court for the Northern District of Illinois in a 

A bankruptcy court wrote that filing for bankruptcy is “powerful magic.”  By finding federal preemption of state law fraudulent transfer claims, the Second Circuit Court of Appeals’ decision in the long-running Tribune case showed just how powerful this magic can be.

(Bankr. E.D. Ky. Apr. 15, 2016)

The bankruptcy court dismisses the plaintiff’s complaint because it failed to state a claim. The complaint was based on a factual assertion that the plaintiff’s predecessor had an interest in certain bank account funds. However, the prior 11 U.S.C. § 363 sale order and confirmation order adjudicated otherwise. Thus, the claims were barred by the doctrine of res judicata. Opinion below.

Judge: Wise

Attorneys for Plaintiff: Philip G. Fairbanks, M. Austin Mehr, John M. Simms

“Can I be personally liable?” Directors, officers, and managers of business entities frequently ask that question of their attorneys. A recent Delaware decision reveals an important area of potentially huge personally liability involving a sudden shutdown caused by insolvency.

Bankruptcy is all about the debtor’s assets, specifically how many and who gets them. The reason that many bankruptcy cases are contentious is that the parties often disagree about the amount of assets available for distribution to creditors, as well as how the assets should be divvied up.

Do you serve on your condominium’s board as a fun way to meet your neighbors and test out your governance skills? What seems like a low-commitment diversion can balloon into a stressful time suck – or worse.  You may be held personally liable for breaching fiduciary duties to your condo.  And if you fall into really bad luck and end up in bankruptcy, you may not even be able to discharge debts for such liability, as a recent Fifth Circuit decision reminds us.  

We’ve previously written on various cases in which parties have sought to save or revive late filed pleadings by arguing those pleadings “relate back” to previously filed documents with varying degrees of success.

– But they weren’t as oppressive as my subject line may imply.

In a 13 page decision, released April 22, 2016, Judge Gross of the Delaware Bankruptcy Court granted a motion to dismiss an adversary proceeding and sanctioned the Plaintiff – disallowing any further litigation against the defendants in the Bankruptcy Court. Judge Gross’ opinion is available here (the “Opinion”).

(Bankr. S.D. Ind. April 11, 2016)