Avoidance Action Update

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Latest from Avoidance Action Update

Written by Evan T. Miller
As the 2022 “Crypto Winter” continues its grip on the cryptocurrency industry, more and more companies in the space are turning to bankruptcy courts for relief.[1]  The inevitable litigation that arises out of those cases requires courts to apply familiar legal frameworks to unavoidably novel fact…

In Judge Owens’s UMB Bank, N.A. v. Sun Capital Partners V, LP (In re LSC Wind Down, LLC), 2020 WL 377015 (Bankr. D. Del. Jan. 23, 2020) opinion, the Court denied Defendants’ 12(b)(6) motion to dismiss Plaintiff-Trustee’s attempt under section 544 to avoid and recover an alleged $42 million fraudulent transfer (the “Transfer”) made to…

Written by Daniel N. Brogan
A recent decision by Judge Sontchi for the Bankruptcy Court for the District of Delaware in Paragon Litigation Trust v. Noble Corp. plc (In re Paragon Offshore, plc, et al.), Adv. Proc. No. 17-51882 (CSS) [D.I. 168] (Bankr. D. Del. Mar. 11, 2019) (“Paragon”) holds that significant Supreme Court precedent…

In Judge Gross’s Miller v. D&M Holdings US Inc. (In re Digital Networks N.A. Inc.) opinion, the Court granted Defendant’s 12(b)(6) motion to dismiss Plaintiff-Trustee’s attempt to avoid prepetition setoffs which accrued to Defendant, yet denied the Motion as it pertained to other non-setoff transfers.  Notable in this case is the fact that Defendant is…

In Judge Gross’s Miller v. D&M Holdings US Inc. (In re Digital Networks N.A. Inc.) opinion, the Court granted Defendant’s 12(b)(6) motion to dismiss Plaintiff-Trustee’s attempt to avoid prepetition setoffs which accrued to Defendant, yet denied the Motion as it pertained to other non-setoff transfers.  Notable in this case is the fact that Defendant is…

In Judge Walrath’s RCS Creditor Trust v. Schulte Roth & Zabel LLP (In re RCS Capital Corp.) opinion, the Court found that the presence of a forum selection clause (“FSC”) was not enough to trump the bankruptcy court’s ability to maintain venue for an avoidance action.  In so finding, the judge agreed with the Trustee-Plaintiff’s…

By Evan T. Miller, Esq.
In Stanziale v. Sprint Corp. (In re Simplexity, LLC), 578 B.R. 255 (Bankr. D. Del. 2017), Delaware Bankruptcy Judge Kevin Gross addressed an issue of first impression: which was the proper date for determining the secured status of a creditor in a preference dispute under 11 U.S.C. § 547(b)(5), the…

By Evan T. Miller, Esq.
In Stanziale v. Sprint Corp. (In re Simplexity, LLC), 578 B.R. 255 (Bankr. D. Del. 2017), Delaware Bankruptcy Judge Kevin Gross addressed an issue of first impression: which was the proper date for determining the secured status of a creditor in a preference dispute under 11 U.S.C. § 547(b)(5), the…

By Evan T. Miller, Esq.
In a helpful reminder for professionals regarding the nuances of 11 U.S.C. § 327 and its intersection with preference law, the Bankruptcy Court for the District of Columbia recently overruled a creditor’s objection to a debtor’s application (the “Application”) to retain special counsel under section 327(e).  The objection, filed in…

By Evan T. Miller, Esq.
Determining the proper bookends when establishing a Historical Period for an ordinary course of business defense (“OCOB”) can be highly contentious in preference litigation.  The same can be said for determining which methodology is most appropriate for analyzing preference period transfers and even when to apply a given defense.  Thankfully,…