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Zazzali v. 1031 Exch. Group (In re DBSI Inc.)

Ruling
Bankruptcy court declined to transfer venue of adversary proceeding out of district where bankruptcy and other adversary proceedings were pending.
Procedural posture

Plaintiff, a litigation trustee for the chapter 11 debtors' estate litigation trust, filed an amended complaint against defendants asserting causes of action for, inter alia, the avoidance and recovery of alleged fraudulent transfers under 11 U.S.C.S. §§ 544, 548, 550, and 551 and under Idaho state law. Certain defendants filed a motion to transfer venue pursuant to 28 U.S.C.S. § 1412.

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Commercial opinion summary, case decided on August 14, 2012 , LexisNexis #0912-032

In re Blitz U.S.A. Inc.

Ruling
Bonus plan proposed by debtor in possession in good faith and in ordinary course of business, based on sound business judgment, approved.
Procedural posture

Debtors, a corporation and affiliated businesses, declared chapter 11 bankruptcy and operated their businesses as debtors-in-possession, pursuant to 11 U.S.C.S. §§ 1107(a) and 1108. The corporation filed a motion seeking permission to pay employees a bonus for Fiscal Year 2012. A committee of unsecured creditors and the United States Trustee ("UST") filed objections. The court held a hearing on corporation's motion.

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Commercial opinion summary, case decided on July 09, 2012 , LexisNexis #0912-042

Zazzali v. Swenson (In re DBSI Inc.)

Ruling
Sovereign immunity did not apply to prevent trustee's fraudulent transfer claims against state tax agencies.
Procedural posture

Trustee of a liquidation trust created by a bankruptcy plan brought an adversary proceeding against defendant state tax agencies seeking to recover allegedly fraudulent transfers under the law of a state pursuant to 11 U.S.C.S. § 544(b). The agencies moved to dismiss the claims based on state sovereign immunity.

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Commercial opinion summary, case decided on January 27, 2012 , LexisNexis #0212-071

Claybrook v. AutoZone Tex. LP (In re American Remanufacturers Inc.)

Ruling
Trustee and counsel sanctioned for unreasonable behavior in pursuing avoidance proceeding.
Procedural posture

In this adversary proceeding where plaintiff Chapter 7 trustee unsuccessfully pursued an avoidance action and an accounts receivable action, defendants filed a motion for sanctions pursuant to 28 U.S.C.S. § 1927 and Fed. R. Bankr. P. 7054(b).

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Commercial opinion summary, case decided on July 28, 2011 , LexisNexis #0811-139

In re Orleans Homebuilders Inc.

Ruling
Debtor willfully violated stay by retrieving steel it had delivered to debtor prepetition.
Procedural posture

Debtors, a corporation that built single-family homes, townhouses, and condominiums and its affiliates, filed petitions under Chapter 11 of the Bankruptcy Code and operated their businesses as debtors-in-possession. The debtors sought an order which required a company ("supplier") that sold steel to the debtors to comply with the automatic stay, and they asked the court to hold the supplier in civil contempt and for damages.

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Commercial opinion summary, case decided on March 08, 2011 , LexisNexis #0311-109

Zazzali v. Wavetronix LLC (In re DBSI Inc.)

Ruling
Fraudulent transfer proceeding against partial owners of transferee LLC dismissed.
Procedural posture

Defendants filed a motion to dismiss the complaint filed by plaintiffs, trustees of debtors' estate litigation trust and debtors' liquidating trust, seeking to recover allegedly fraudulent conveyances from defendants under 11 U.S.C.S. § 548 and state law, alleging that one defendant breached his personal guaranty, alleging breach of fiduciary duties, alleging unjust enrichment, and alleging breach of an operating agreement.

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Commercial opinion summary, case decided on March 04, 2011 , LexisNexis #0411-020

DGI Liquidating Trust v. William Gallagher Assocs. Ins. Brokers Inc. (In re DGI Resolutions Inc.)

Ruling
Trustee's avoidance proceeding based on allegedly unauthorized transfer to insurance broker dismissed due to court authorization for debtor obtaining and continuing insurance coverage.
Procedural posture

Defendant insurance broker moved to dismiss a three-count adversary complaint filed by plaintiff, the trustee for a liquidating trust, in which plaintiff sought to recover, in whole or on a prorated basis, a fee paid to the broker in connection with its procurement of a rider extending insurance coverage past the date of its liquidation. Plaintiff's theories included that the payment was unauthorized and thus avoidable under 11 U.S.C.S. § 549.

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Commercial opinion summary, case decided on February 17, 2011 , LexisNexis #0311-059

Zazzali v. Swenson (In re DBSI Inc.)

Ruling
Sovereign immunity does not apply to prevent state law fraudulent transfer proceedings against IRS.
Procedural posture

A chapter 11 trustee filed a complaint against defendants, the IRS and insiders, to recover allegedly fraudulent transfers made to the insiders and on behalf of the insiders to the IRS and state taxing authorities. Pursuant to Fed. R. Civ. P. 12(b)(6), the United States filed an amended motion to dismiss those counts seeking to recover transfers made to the IRS under 11 U.S.C.S. § 544(b)(1), applying Idaho fraudulent transfer statutes.

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Commercial opinion summary, case decided on February 11, 2011 , LexisNexis #0411-016

Claybrook v. AutoZone Texas LP (In re American Remanufacturers Inc.)

Ruling
Trustee could reopen case to pursue receivables due debtor.
Procedural posture

Defendants filed a motion to dismiss plaintiff Chapter 7 trustee's complaint for damages, which alleged breach of contract, quantum meruit, and turnover of estate property, all based on vendor agreements between defendants and the debtors.

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Commercial opinion summary, case decided on December 08, 2010 , LexisNexis #0111-023

In re Nextmedia Group Inc.

Ruling
Claim disallowed where creditor failed to timely provide schedule required by prepetition asset purchase agreement.
Procedural posture

Debtors, a communications company and affiliated businesses, filed voluntary petitions under chapter 11, and claimant, a communications company that entered into an agreement with one of the debtors, filed an unsecured claim against that debtor's bankruptcy estate. The debtor filed an objection to the claim.

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Commercial opinion summary, case decided on November 05, 2010 , LexisNexis #1210-009