3rd Circuit

Faulty Pleading Resulted in Dismissal of a Suit by an ‘Unknown’ Creditor

Third Circuit dicta suggests that failure to create a trust is constitutionally deficient and won’t discharge claims of ‘unknown’ creditors in a chapter 11 plan.

No Disqualification When Lawyers at Adversary Firms Were Dating

Delaware bankruptcy judge trusts that dating lawyers at adversary firms didn’t disclose client confidences.

Pennsylvania District Judge Holds that FLSA Suit Is Not Halted by Automatic Stay

Splitting with the Sixth Circuit, Pittsburgh district judge rules that a FLSA suit falls within the ‘police and regulatory’ exception to the automatic stay.

Third Circuit Rejects Triangular Setoffs and Adopts Rationale by Judge Shannon

A triangular setoff valid under state law does not satisfy the mutuality requirement in Section 553(a).

Third Circuit Resurrects an ‘Admin’ Claim When the Stalking Horse Had No Breakup Fee

The Third Circuit found loopholes in the purchase agreement permitting the buyer to assert an administrative claim, even though the breakup fee was disallowed.

Third Circuit Upholds Equitable Mootness over a Dissent

Dissenter would have upheld horizontal gifting on the merits.

Bankruptcy Judge Won’t Rule on the Constitutionality of Pandemic Regulations

Finding a proper exercise of regulatory power isn’t required to invoke the exception to the automatic stay.

Pursuing Appointment as a Future Claims Representative Isn’t Compensable in Delaware

Pursuing appointment benefitted the professional career of the applicant and did not benefit the estate, Judge Silverstein said.

Exercise Caution in Electing Remedies Against Someone Who May File Bankruptcy

Sometimes, being too aggressive backfires when the defendant files bankruptcy.

‘Lifetime’ Club Memberships May Not Survive Bankruptcy

Before paying up front for a lifetime club membership, read the fine print and consult a lawyer.