McAuley Galassini v. Galassini – Defendant’s Memorandum in Support of Motion to Dismiss Adversary Proceeding

Date: August 13, 2011 Author: burbageweddell

08/12/2011 – Defendant’s Memorandum in Support of Motion to Dismiss Adversary Proceeding filed in the Adversary Proceedings by Galassini before U.S. Bankruptcy Judge Pamela S. Hollis in the Northern District of Illinois (Eastern) filed by  O’Rourke & Moody (Chicago, IL) attorney Michael C. Moody .

Defendant, Timothy Galassini (“Defendant” or “Mr. Galassini”) seeks dismissal of  a Section 547 – preference – and a Section 548 – fraudulent conveyance – complaint filed by his former wife as debtor-in-possession (“Plaintiff” or “Debtor”). Pursuant to a Dissolution of Marriage, the Defendant received $174,025 for marital assets, $100,000 toward Mr. Galassini’s attorneys fees in the divorce action and $360,000 connection with the Debtor’s receipt of sole title to the marital residence. The motion to dismiss is based on the domestic support defense in Section 547(c)(7) and the Debtor’s solvency during the preference period.  Registered users click here to see a copy of this brief.

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Lehman Brothers Bankruptcy: Defendant JPMorgan’s Supplemental Memorandum of Law in Support of Motion to Dismiss

Date: August 7, 2011 Author: burbageweddell

08/05/2011 – Defendant’s Supplemental Memorandum of Law in Support of Motion to Dismiss filed in the Lehman Commercial Paper Inc. Adversary Proceedings by JPMorgan Chase Bank, N.A. before U.S. Bankruptcy Judge James M. Peck in the Southern District of New York (Manhattan) filed by  Wachtell, Lipton, Rosen & Katz (New York, NY) by attorney Paul Vizcarrondo, Jr.; Of counsel: Harold S. Novikoff, Amy R. Wolf, Douglas K. Mayer, David C. Bryan, Emil A. Kleinhaus and Alexander B. Lees .

JPMorgan Chase Bank, N.A. (“JPMorgan” or “Defendant”) argues that, in view of Stern v. Marshall, 131 S. Ct. 2594 (2011) (“Stern”), the Bankruptcy Court lacks authority to determine any of the 49 claims in the Amended Complaint of Lehman Brothers Holdings Inc. (“LBHI”) and Official Committee of Unsecured Creditors of Lehman Brothers Holdings Inc. (collectively with LBHI, “Plaintiff”). Registered users click here to see a copy of this brief.

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Lehman Commercial Paper Inc. Bankruptcy: Lehman Brothers Holdings Inc. et al v. JPMorgan Chase Bank, N.A. – Plaintiffs Memorandum Addressing the Effect of Stern v. Marshall

Author: burbageweddell

Plaintiffs Memorandum Addressing the Effect of the Supreme Courts Decision in Stern v. Marshall on the Bankruptcy Courts Ability to Render Final Judgment on the Common Law Claims filed in the Lehman Commercial Paper Inc. Adversary Proceedings by JPMorgan Chase Bank, N.A. before U.S. Bankruptcy Judge James M. Peck in the Southern District of New York (Manhattan) filed by  Curtis Mallet-Prevost Colt & Mosle LLP (New York, NY) attorneys Joseph D. Pizzurro; L. P. Harrison 3rd; Michael J. Moscato; Nancy E. Delaney; Peter J. Behmke; and Cindi Eilbott Giglio; and Quinn Emanuel Urquhart & Sullivan LLP attorneys John B. Quinn and Erica Taggart as Special Counsel to Plaintiff Intervenor, the Official Committee of Unsecured Creditors of Lehman Brothers Holdings Inc., et al.

Lehman Brothers Holdings Inc. and Official Committee of Unsecured Creditors of Lehman Brothers Holdings Inc. (“Plaintiff”) argues that, despite the United States Supreme Court holding in Stern v. Marshall, 131 S. Ct. 2594 (2011), the Court has the power to enter final orders with respect to the 49 counts asserted in the First Amended Complaint (the “Amended Complaint”) — including the common law counts — and the eight counts asserted in JPMorgan Chase Bank, N.A.’s (“JPMorgan”) counterclaim. This brief is Plaintiff’s half of a duet of briefing requested by U.S. Bankruptcy Judge James M. Peck. Reading the 2 briefs side by side, two things are clear: the meaning of Stern is subject to broad and conflicting interpretation; and the U.S. Bankruptcy Courts are left with an task of conducting an initial evaluation of the issues that will entail much of the legal issue analysis that formerly could wait until a motion for summary judgment or even trial. Registered users click here to see a copy of this brief.

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Chapter 7 Trustee Starts Dean & Moore Insurance, Inc. Bankruptcy Transfer Avoidance Proceedings

Author: burbageweddell

On August 5, 2011, Tamara Miles Ogier, Trustee in the Dean & Moore Insurance, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 29 complaints – 23 complaints include Georgia fraudulent conveyance claims O.C.G.A. Sec. 18-2-70; 12 include Section 548 fraudulent conveyance claims; certain complaints also include equitable subordination, other state law claims and a preferential transfer claim complaints in the Northern District of Georgia (Atlanta). The Debtor operated an insurance agency. The Trustee admits that the Debtor conducted both “legitimate and illegitimate” operations. The Trustee claims, however, that the Debtor’s activities constituted a Ponzi scheme, based in part on “obtaining policies for fictitious persons and entities and other activities that allowed Debtor to obtain funds through fraudulent representations.”

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Qimonda Richmond, LLC Bankruptcy: Qimonda Richmond, LLC v. Citibank Memorandum of Law in Support of Motion to Dismiss

Date: August 4, 2011 Author: burbageweddell

08/03/2011 – Memorandum of Law in Support of Motion to Dismiss filed in the Qimonda Richmond, LLC Adversary Proceedings by Citibank, National Association et al before U.S. Bankruptcy Judge Mary F. Walrath in the District of Delaware filed by  Morris, Nichols, Arsht & Tunnell LLP (Wilmington, DE) attorneys Gregory W. Werkheiser and Andrew R. Remming; and Milbank, Tweed, Hadley & McCloy LLP (New York, NY) attorneys Scott A. Edelman and Sander Bak .

Citibank, National Association seeks dismissal of a complaint for recovery of an allegedly preferential and fraudulent transfer of approximately $34 million. Citibank makes arguments based on Citibank’s status as a secured creditor, the presence of “reasonably equivalent” value; and its exercise of a right of setoff, but the first and primary argument is based on the Section 546(e) safe harbor.

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Hudson Healthcare, Inc. Bankrutpcy: 20 Largest Unsecured Creditors

Date: August 1, 2011 Author: burbageweddell

Hudson Healthcare, Inc. (the “Debtor” ) filed a voluntary petition under Chapter 11 of the Bankruptcy Code on August 1, 2011 in the Bankruptcy Court for the District of New Jersey (Case No. 11-10614). The Honorable Donald H. Steckroth has been assigned to the case.   The Debtor estimates that it has between 1,000 and 5,000 creditors and liabilities between $10 and $50 million.  This initial note provides the Debtor’s list of its 20 largest unsecured creditors.  

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Chapter 7 Trustee Starts DHP Holdings II Corporation aka DESA Bankruptcy Preference Adversary Proceedings

Date: July 31, 2011 Author: burbageweddell

On July 29, 2011 and July 30, 2011, Alfred Thomas Giuliano, Chapter 7 Trustee in the DHP Holdings II Corporation aka DESA Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 145 complaints in the District of Delaware.  The complaints are meticulous. Relationship pleading abounds. The identification of transfers crosses every “t” and dots every “i”.  When everything is pleaded with such attention to detail, the omission of a key fact tends to stick out. The omitted fact in these complaints – the date the interim Trustee’s appointment became permanent. Only the date of his interim appointment is pleaded.

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Sunset Aviation, Inc. Bankruptcy: Shorenstein Company LLC’s Reply in Support of Motion to Dismiss with Prejudice

Author: burbageweddell

07/27/2011 – Defendant’s Reply in Further Support of Its Motion to Dismiss with Prejudice filed in the Sunset Aviation, Inc. Adversary Proceedings by Shorenstein Company LLC before Judge Walsh in the District of Delaware filed by  Cross & Simon LLC (Wilmington, Delaware) attorney Michael J. Joyce; and Morrison & Foerster LLP (New York, New York) attorneys Melissa A. Hager John A. Pintarelli. Defendant Shorenstein Company LLC’s reply takes apart every aspect of the Chapter 7 Trustee’s position that substantive consolidation order shifted the date for calculating the preference period to the earliest debtor petition date. However, what makes this reply especially noteworthy is (1) its retort to the Trustee’s “equity of creditors” rhetoric; (2) its discussion of the Third Circuit’s approach to substantive consolidation; and (3) its argument that, if the Court is inclined to give nunc pro tunc effect, it should be to the petition date of the last filing debtor.

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$376 Million Preference Complaint against Quebecor Noteholders Dismissed

Date: July 29, 2011 Author: burbageweddell

Concluding that the recent opinion of the Court of Appeals for the Second Circuit in In re Enron Creditors Recovery Corp. v. Alfa, S.A.B. de C.V., __F. 3d __, 2011 WL 2536101 (2d Cir. June 28, 2011) (“Enron“) left him no choice, Southern District of New York United States Bankruptcy Judge James M. Peck grants summary judgment to the defendant noteholders against a claim recovery of approximately $376 million received from Quebecor World (USA) Inc. during the preference period.  As interpreted in Enron, Judge Beck found that the “settlement payment” protection from avoidance in Bankruptcy Code Section 546(e) protected the transfer of cash made to complete a repurchase and subsequent cancellation of privately-placed notes.  Judge Peck makes clear that he did not agree with this result: “Purely from an equitable perspective, the disparity in relative recoveries between the Noteholders and Quebecor’s other creditors almost cries out for a remedy unless the payments fall within an appropriately more favored category of transfers that logically fits the definition of settlement payments under the Code.” 

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