Earlier this month, Avidity Partners, LLC (“Avidity”), in its role as claims agent for the bankruptcy estates of AbitibiBowater, Inc., et al. (“Debtors”), began filing avoidance actions against various defendants. As alleged in the complaints, on April 16, 2009, Debtors filed petitions for bankruptcy with the United States Bankruptcy Court for the District of Delaware. As I reported in a prior post concerning the AbitibiBowater bankruptcy, going in to bankruptcy Debtors were one of the largest newsprint producers in the world (my prior post regarding the AbitibiBowater bankruptcy is available here for review).
On November 23, 2010, the Delaware Bankruptcy Court approved Debtors’ Second Amended Joint Plan of Reorganization. Debtors’ Plan of Reorganization became effective December 9, 2010. Under the Plan, Debtors appointed Avidity as claims agent to litigate and/or settle avoidance actions pursuant to sections 547 and 548 of the United States Bankruptcy Code.
The AbitibiBowater avoidance actions, along with the AbitibiBowater bankruptcy proceeding, are before the Honorable Kevin J.
Earlier this month, the Chapter 7 Trustee (the “Trustee”) appointed in the Indalex bankruptcy began filing avoidance actions against various Indalex creditors. For those not familiar with the Indalex bankruptcy, Indalex filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware on March 20, 2009. Prior to filing bankruptcy, Indalex was one of the largest aluminum extruders in the United States.
In April of 2009, I wrote a post summarizing the Indalex bankruptcy proceeding. A link to my prior post is available here for review. Months after Indalex filed for bankruptcy, the company sold substantially all of its assets.
Background
Last month, the Chapter 7 Trustee in the Sunset Aviation bankruptcy began filing preference actions against various defendants seeking the recovery of alleged avoidable transfers. The Sunset Aviation bankruptcy proceeding includes the consolidated bankruptcies of Sunset Aviation, Inc., JetDirect Aviation and Regal Jets, LLC. The first bankruptcy commenced on February 25, 2009, when Regal Jets filed a petition for chapter 11 bankruptcy protection with the United States Bankruptcy Court for the District of Delaware. On March 6, 2009, Sunset Aviation filed a petition for bankruptcy under chapter 7 of the Bankruptcy Code. JetDirect filed its chapter 7 petition on May 1, 2009. On June 10, 2009, the Regal bankruptcy proceeding was converted from a chapter 11 reorganization to a chapter 7 liquidation. Soon after, the Office of the United States Trustee appointed the Chapter 7 Trustee.
Debtors’ Operations
Prior to filing for bankruptcy, Debtors provided a range of services for the private aviation industry. These services included brokering the sales and rentals of private jets, in-flight catering, records management and aircraft utilization. According to court filings by the Chapter 7 Trustee, although the Debtors were separate legal entities, the companies operated from the same headquarters, co-mingled assets and were generally viewed by their creditors as a single entity. Based on these findings, the Trustee filed a motion to substantively consolidate the bankruptcy proceedings in July of 2010. The Court granted the Trustee’s consolidation motion the following month.
The Preference Actions
As is common in avoidance actions, the Chapter 7 Trustee in Sunset Aviation seeks to recover pursuant to several different causes of action. Pursuant to section 547 of the Bankruptcy Code, the Trustee seeks to avoid and recover transfers for the ninety days prior to the Debtors’ petition date – November 27, 2008 to February 25, 2009. According to the complaints, the “preference period” is calculated based on the earliest bankruptcy petition date for the consolidated Debtors.
Conclusion
The Sunset Aviation bankruptcy is before the Honorable Peter J.
Last year, the Liquidating Trustee (the “Trustee”) in the Midway Games bankruptcy began filing avoidance actions against creditors of the bankruptcy estate. Midway Games (“Midway” or the “Debtor”) filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware on February 12, 2009. For those not familiar with this bankruptcy proceeding, Midway developed and distributed video games throughout the North America, Europe and Asia. See Debtor’s Declaration in Support of First Day Motions (“Declaration”) at *4.
On May 21, 2010, the Bankruptcy Court entered an Order confirming Midway’s joint chapter 11 plan of liquidation (the “Plan of Liquidation”). Under the Plan of Liquidation, Buchwald Capital Advisors LLC was appointed the Trustee. The Trustee’s responsibilities include collecting and distributing assets of Midway. More specifically, the Trustee is responsible for commencing causes of actions on behalf of the bankruptcy estate.
The Midway Games bankruptcy, as well as the avoidance actions filed by the Trustee, are pending before the Honorable Kevin Gross. The Trustee is represented by Nieger LLP and Stevens & Lee, P.C.
Jason Cornell practices with the law firm Fox Rothschild LLP in Wilmington, Delaware. You can reach Jason at 302 427 5512, or jcornell@foxrothschild.com.
Introduction
In December of 2010, the Official Committee of Unsecured Creditors (the “Committee”), in the Precision Parts International (“PPI”) bankruptcy commenced several avoidance actions against various creditors of PPI. As reflected in the Committee’s complaints, on November 12, 2010, the Delaware Bankruptcy Court entered an order granting the Committee derivative standing to prosecute avoidance actions on behalf of the PPI bankruptcy estate. This post will look briefly at the nature of PPI’s business, why the company filed for bankruptcy and provide information relevant to avoidance actions.
Background
PPI filed for bankruptcy in Delaware on December 12, 2008. As stated in the , at the time it filed for bankruptcy, PPI designed and manufactured metal stamping in a process known as “fineblanking.” In addition to the automotive market, PPI sold its products to the construction, agriculture and lawn and garden industries. Based in Rochester Hills, Michigan, PPI operated six manufacturing facilities in North America. .
Why PPI Filed for Bankruptcy
PPI’s success was tied, in large part, to the U.S.
Introduction
Earlier this month, the Chapter 7 Trustee (the “Trustee”) in the Consolidated Bedding bankruptcy commenced several avoidance actions under sections 547 and 548 of the Bankruptcy Code. Consolidated commenced this bankruptcy proceeding on May 29, 2009, when it filed petitions for bankruptcy under Chapter 7 of the Bankruptcy Code. Consolidated manufactured and sold mattresses under the trade name “Spring Air.” According to documents filed with the Delaware Bankruptcy Court, Consolidated ceased operations and terminated its employees prior to filing for bankruptcy.
Events Leading to Bankruptcy
On May 13, 2009 (two weeks before filing for bankruptcy), certain lenders of Consolidated sent notices of default under the company’s loan agreement. Soon after, the lenders accelerated Consolidated’s loan obligations and demanded repayment. Approximately two weeks after sending the notice of default, Consolidated and its lender entered into a foreclosure agreement whereby the company agreed to sell substantially all of its assets to Spring Air International LLC. After the sale to Spring Air International, Consolidated filed for bankrupty and the Trustee was appointed.
The Avoidance Actions
As of the date of this post, the Trustee has filed over 80 avoidance actions against various defendants. These adversary actions, as well as the main case, are before the Honorable Brendan L.