Delaware

Critical Vendor Status Is No Defense to a Preference Claim

Critical vendor status is a defense to a preference claim only when the defendant was specifically named in an order, stipulation or agreement requiring full payment of the creditor’s prepetition claim, Judge Dorsey says.

Contingency Fees Under a Trust Indenture May Not Result in a Claim, Judge Shannon Says

A standard provision in a trust indenture meant no recovery for the indenture trustee’s attorneys.

Judge Sontchi Cuts Off U.S. Trustee Fees on Confirmation of a Chapter 11 Plan

Closing a chapter 11 case after confirmation to avoid U.S. Trustee fees won’t be necessary if the ruling by Judge Sontchi holds up.

Increasing Debtor’s Profit or Revenue Isn’t Required to Establish an ‘Admin’ Claim

An administrative creditor isn’t a ‘guarantor’ of the success of the project, Delaware’s Bankruptcy Judge Goldblatt says.

Federal Common Law Doesn’t Define a Business Trust Eligible for Chapter 11

Recent Supreme Court authority supports the conclusion by Delaware’s Judge Sontchi that law from the jurisdiction of incorporation, not federal common law, determines what is or isn’t a business trust eligible for chapter 11.

Jevic Rises from the Dead to Bar Claims Brought Originally by the Creditors’ Committee

Not having challenged pre-petition liens on time, a chapter 7 trustee was barred from taking over an adversary proceeding initiated by a now-dissolved chapter 11 creditors’ committee.

No Disqualification When Lawyers at Adversary Firms Were Dating

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

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.

A Credit Bid Doesn’t Cap the Value of a Secured Lender’s Collateral

Delaware district judge holds that the final bid at auction, not the lender’s last credit bid, fixes the value of the lender’s collateral.

University Medical Unscathed After Denby-Peterson, Delaware District Judge Says

The government lost a winnable appeal by failing to present evidence in bankruptcy court.

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