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Motion to Dismiss Bankruptcy Court

DLA Piper

Delaware District Court Sheds Light on Standards for Dismissal of Chapter 11 Case Based on Bad Faith

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On August 28, 2024, Judge Gregory B. Williams of the US District Court for the District of Delaware issued a ruling in AIG Financial Products Corporation, Civ. No. 23-573, affirming an order on appeal from the Delaware...more

King & Spalding

Trustee’s Fraudulent Transfer Claims Survive Motion to Dismiss in Connection with Bernie Madoff Ponzi Scheme

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On March 14, 2024, the U.S. District Court for the Southern District of New York denied a motion by Citibank, N.A. for leave to file an interlocutory appeal of a bankruptcy court’s order denying a motion to dismiss fraudulent...more

Proskauer Rose LLP

Staying Afloat in an Uncertain Economic World: Hope for the Best, Prepare for the Worst Private Credit Restructuring Year in...

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While global inflation and higher-for-longer interest rates dominated macroeconomic headlines over the last year, middle-market private credit restructurings witnessed three notable trends.  First, these credits remained...more

Vinson & Elkins LLP

Invest in Texas: A Powerful Defense of Limited Liability

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Chris Popov and Mike Heidler, partners at Vinson & Elkins, talk through a major opinion from the Texas Supreme Court, their role in the case, and what it means for investors in Texas companies....more

Holland & Hart LLP

Why Bankruptcy Is A Budding Alternative For Cannabis Cos.

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Bankruptcy can be a remarkable tool for rehabilitating a struggling business, preserving jobs and going-concern value, and liquidating the assets of an insolvent company. The drafters of this country's bankruptcy laws...more

King & Spalding

Aiding and Abetting Breach of Fiduciary Duty Claims Against Lender Survive Motion to Dismiss

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On April 26, 2023, the U.S. Bankruptcy Court for the District of Delaware denied in part and granted in part motions to dismiss a chapter 7 trustee’s breach of fiduciary duty and aiding and abetting claims. The defendants...more

Wiley Rein LLP

Insurer’s Motion to Dismiss Denied Where Complaint Plausibly Alleged Rescission of Policies Was Untimely Under Wisconsin Statute

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The United States Bankruptcy Court for the Eastern District of Wisconsin, applying Wisconsin law, denied an insurer’s motion to dismiss on the grounds that the insured dentist’s complaint plausibly alleged that the insurer’s...more

Patterson Belknap Webb & Tyler LLP

Applying the Barton Doctrine, the Fifth Circuit Deepends Its Schism with the Eleventh

In a recent per curium opinion, the Fifth Circuit recommitted to its practice of dismissing claims against court-appointed fiduciaries when plaintiffs fail to obtain permission before bringing suit.  The court rested its...more

Maron Marvel

3rd Circuit Rejects Johnson & Johnson’s Effort To Set Up Subsidiary In Bankruptcy Court To Resolve Talc Asbestos Claims

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On January 30, 2023, the Third Circuit dismissed Johnson & Johnson (J&J)’s subsidiary LTL’s Chapter 11 bankruptcy petition because the facts did not support the financial distress required for the entity’s good faith filing...more

King & Spalding

Fraudulent Transfer Claims Against Investors Survive Motions to Dismiss

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On October 12, 2022, the U.S. Bankruptcy Court for the Southern District of New York denied motions to dismiss fraudulent transfer claims asserted against certain investors in Tops Holding II Corporation. In 2007, a group of...more

Proskauer Rose LLP

Liability Management – Vaccine or Pandemic? Private Credit Restructuring Year in Review

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Once again, we reflect on the prior year for restructuring trends impacting private credit lenders. Last year it was all about “liability management”—the latest trend in which the limits of sponsor-favorable loan documents...more

Nelson Mullins Riley & Scarborough LLP

The Not-So-Automatic Stay for Foreign Assets and Creditors

When a debtor files for bankruptcy, it’s axiomatic that all creditors, wherever located, must immediately cease their efforts to collect on debts owed to them by that debtor, right? Not necessarily so, says the United States...more

Nelson Mullins Riley & Scarborough LLP

Bankruptcy Court Narrowly Construes Section 546(e) Safe Harbor

On August 18, 2022, the United States Bankruptcy Court for the Southern District of Indiana, in In re BWGS, LLC, No. 19-01487-JMC-7A, 2022 WL 3568045 (Bankr. S.D. Ind. Aug. 18, 2022), narrowly interpreted the safe harbor...more

Fox Rothschild LLP

Surviving Rule 12(b)(6) Motion Does Could Still Lead to Sanctions Under Bankruptcy Rule 9011

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Surviving a motion to dismiss does not necessarily mean that counsel drafting a pleading will survive a motion for sanctions under Rule 9011 if they have not conducted a “reasonable inquiry” of the allegations and/or that the...more

Harris Beach PLLC

Cannabis-Related Companies Can’t File Bankruptcy Until Federal Legalization

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Although the use of cannabis has been legalized in approximately 39 states and the District of Columbia¹ , cannabis is still illegal federally and classified as a Schedule I drug under the Controlled Substances Act. As a...more

Nelson Mullins Riley & Scarborough LLP

Crossing the “The”: The Importance of Careful Drafting for Recorded Mortgages

In Enter. Bank v. The Ingros Fam. LLC, et al., 2022 WL 2283392 (Bankr. W.D. Pa. June 23, 2022), a lender faced a potentially costly decision when it mistakenly left the word “The” from a borrower’s name. In Ingros, First...more

Arnall Golden Gregory LLP

Delaware Bankruptcy Court Decision Highlights Potential Defenses to Equitable Subordination Claim

On March 25, 2022, the United States Bankruptcy Court for the District of Delaware dismissed a complaint filed against a lender and other entities. An individual (and others) formerly in control of the bankrupt companies sued...more

Cadwalader, Wickersham & Taft LLP

Delaware Bankruptcy Court Rules that Unsecured Creditors of a Solvent Debtor Are Entitled to Post-Petition Interest at the Federal...

On December 22, 2021, Judge Mary Walrath of the Bankruptcy Court for the District of Delaware held in In re The Hertz Corp. that redemption premiums may potentially qualify as unmatured interest, and that, to the extent that...more

Dechert LLP

Avoiding an Out-of-Court Restructuring May Breach Fiduciary Duties

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Introduction Under Delaware law, the board of directors of an insolvent company has wide latitude to pursue good-faith strategies to maximize the value of the firm. Trenwick Am. Litig. Tr. v. Ernst & Young, L.L.P., 906 A.2d...more

Patterson Belknap Webb & Tyler LLP

Blurred Immunity: California Cannot Escape Adversary Proceeding on Grounds of Sovereign Immunity

In 2018, the liquidating trustee for Venoco, LLC and its affiliated debtors (collectively, the “Debtors”) commenced an action in the United States Bankruptcy Court for the District of Delaware seeking monetary damages from...more

Fox Rothschild LLP

Payment To Stalking Horse Permissible When Sale Price Less Than Stalking Horse Bid

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In an issue of first impression, in In re Energy Future Holdings Corp., 2021 U.S. App. LEXIS 7400 (3d Cir. Mar. 15, 2021), the Third Circuit addressed the question whether an initial bidder whose break-up fee was disallowed...more

Patterson Belknap Webb & Tyler LLP

Court Dismisses Bankruptcy Case to Enable Debtor to Seek a Paycheck Protection Loan

It is well known in the restructuring world that a debtor in bankruptcy can’t get a PPP loan. But what if you’re a debtor and decide a PPP loan could save your business? Will a court dismiss the case so you can seek a loan?...more

Bradley Arant Boult Cummings LLP

Pre-Pandemic Chapter 13 Defaults Received CARES Act Modification Protection in the Middle District of Alabama

In a notable decision interpreting the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Bankruptcy Court for the Middle District of Alabama held that Chapter 13 debtors behind on their payments...more

Patterson Belknap Webb & Tyler LLP

Delaware Bankruptcy Court Rejects Late Filings of Asbestos Claims

Last February, we blogged about the Third Circuit’s decision in In re Energy Future Holdings Corp, No. 19-1430, 2020 U.S. App. LEXIS 4947 (Feb. 18, 2020). The Third Circuit approved a process for resolving asbestos claims in...more

Vinson & Elkins LLP

In re Pace Industries, LLC: Minority Shareholder With Bankruptcy Consent Rights Considered Controlling Minority Shareholder With...

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A recent bench ruling in In re Pace Industries, LLC1 by Judge Walrath for the Bankruptcy Court for the District of Delaware (the “Court”) has validated a chapter 11 bankruptcy filing by certain debtors in the jointly...more

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