Trustees are increasingly being asked to hold trust assets in their name in securitization and other structured finance transactions in which both New York and Delaware trusts are used. This is a reversal of sorts of a principal advantage introduced in the securitization industry in the late 1980s by the Delaware Statutory Trust Act: the trust…

Under an opinion dated October 14, 2014, the Delaware Bankruptcy Court denied opposing motion for summary judgment in a proceeding initiated by the plaintiff-trustee to avoid and recover alleged preferential transfers. The defendant (a pre-petition creditor of the debtor) moved for summary judgment on the ordinary course of business defense, arguing that the payments to it…

Under a memorandum order dated October 23, 2014, the Delaware Bankruptcy Court denied a party’s request to have the debtors’ chapter 11 cases converted to chapter 7 cases. While sympathetic to the movant’s request, the court ultimately determined that the relevant parties were making some progress toward the goal of a plan of reorganization and therefore…

On October 9, 2014, in Flintkote Co. v. Aviva PLC, No. 13-4055, the Third Circuit reversed an order holding on an estoppel theory that an insurer was required to arbitrate even though it had no written arbitration agreement with the debtor. The Third Circuit held that the debtor had not presented clear and convincing proof that…

In Octane Fitness LLC v. ICON Health & Fitness, the U.S. Supreme Court evaluated the language in 35 U.S.C. Section 285, a statute that allows for the award of attorney fees to prevailing parties in "exceptional" patent infringement cases, and rejected a restrictive interpretation of the statute by the U.S. Court of Appeals for the Federal Circuit.

On October 15, 2014, the Delaware Bankruptcy Court confirmed that the Delaware District Court’s new 6:00 p.m. Eastern Time filing deadline does not apply to filings in the Delaware Bankruptcy Court and that the Bankruptcy Court’s Local Rules and related procedures remain in full force and effect. However, the District Court’s new filing procedures do apply…

Chief Judge Stark provided clarification regarding the Delaware District Court’s new filing and service deadline of 6:00 p.m., effective October 16.

In In re KKR Financial Holdings LLC Shareholder Litigation, the Court of Chancery granted defendants’ motions to dismiss with prejudice a suit challenging the acquisition of KKR Financial Holdings LLC by KKR & Co. L.P.

In an opinion assessing damages in In re Rural/Metro Corp. S’holders Litig., the Court of Chancery held that a financial advisor, which had been held liable in an earlier opinion for aiding and abetting breaches of fiduciary duty by a board of directors in connection with approving a merger and related disclosures, would be required to pay 83% of the damages to the stockholder class.

On September 30, 2014, the United States District Court for the District of Delaware entered an order affirming the Delaware Bankruptcy Court’s grant of summary judgment to a defendant/appellee on a plaintiff/appellant’s claims to avoid and recover two equity distributions totaling $55 million as constructively fraudulent transfers. Whyte v. Ritchie SH Hldgs. LLC, et al (In…