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Krys v. Sugrue

Plaintiff trustee of a litigation trust which was assigned claims of the estate of a bankruptcy debtor, brought actions in state courts against defendants, agents and insiders of the debtor and others, including a bank, alleging that defendants aided and abetted the debtor's fraud. The actions were removed to federal court, the trustee moved to remand the actions, and the bank moved to refer claims against it to the bankruptcy court.
Ruling: 
Motion to remand fraud action directly related to debtors'bankruptcy denied.
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Commercial case opionion summary, case decided on October 23,2008, LexisNexis #1108-104

Northwestern Mutual Life Ins. Co. v. Delta Air Lines Inc. (In re Delta Air Lines Inc.)

Appellee debtor, an airline, filed a petition under chapter 11 of the Bankruptcy Code, and appellant claimants filed claims seeking payment of approximately $ 1 billion based on tax indemnification agreements (TIAs) the debtor and the claimants entered. The Bankruptcy Court for the Southern District of New York upheld the debtor's objections to the claims, and the parties filed cross-appeals.
Ruling: 
Bankruptcy court properly upheld debtor's objections to claims for payment under tax indemnification agreements where plan provision for payment with stock of reorganized debtor was forseeable.
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Commercial case opionion summary, case decided on September 29,2008, LexisNexis #1108-031

Glatzer v. Enron Corp.

Appellee debtors filed petitions under chapter 11 of the Bankruptcy Code, and appellant claimant filed three proofs of claim against the debtors' bankruptcy estates. The United States Bankruptcy Court for the Southern District of New York disallowed and expunged all three claims, pursuant to 11 U.S.C.S. § 502, and the claimant appealed.
Ruling: 
Bankruptcy court properly disallowed all three of creditor's claims based on matters dismissed in state and federal courts.
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Commercial case opionion summary, case decided on September 29,2008, LexisNexis #1108-026

In re Copperfield Invs. LLC

A debtor filed for relief under chapter 11 of the Bankruptcy Code. In addition to the bankruptcy proceeding, the debtor was involved in a civil action pending with the court, that involved substantially the same factual issues as those presented in the bankruptcy proceeding. A creditor filed a motion to withdraw the reference to the bankruptcy court.
Ruling: 
Motion to withdraw reference denied where claims at issue involved core matters.
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Commercial case opionion summary, case decided on September 29,2008, LexisNexis #1208-090

Urban Communicators PCS Ltd. Pship v. Gabriel Capital LP

Creditor moved to compel payment of cash collateral under 11 U.S.C.S. §§ 362(d) and 363(e). It sought proceeds of a certain Federal Communications Commission (FCC) license sale. Debtors argued the creditor was not secured. The Bankruptcy Court for the Southern District of New York ruled that the creditor was secured. It also determined the appropriate rate of post-petition interest on the creditor's claim. Both sides appealed.
Ruling: 
Bankruptcy court erred in reducing postpetition interest on unsecured claim.
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Commercial case opionion summary, case decided on September 12,2008, LexisNexis #1008-025

In re Source Enters.

Appellant, a law firm that had represented affiliated debtors as bankruptcy counsel challenged an order of the U.S. Bankruptcy Court for the Southern District of New York confirming its plan of reorganization. At issue was whether appellant's challenge to confirmation was foreclosed because the plan had been"substantially consummated" within the meaning of 11 U.S.C.S. § 1101(2) and whether other provisions were violated.
Ruling: 
Appeal of plan confirmation denied as moot due to substantial consummation.
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Commercial case opionion summary, case decided on August 12,2008, LexisNexis #0908-010

City of Ann Arbor Employees Ret. Sys. v. Citigroup Mortg. Loan Trust Inc.

Plaintiff retirement system and investors brought a class action against defendant mortgage loan trusts in state court, alleging violations of 15 U.S.C.S. §§ 77k and 77o. The matter was removed to federal district court. The retirement system and investors moved to remand on the ground that 15 U.S.C.S. § 77v(a) prohibited removal of cases brought under the Securities Act of 1933.
Ruling: 
Securities claims had conceivable effect on debtor's bankruptcy and were properly removed.
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Commercial case opionion summary, case decided on August 11,2008, LexisNexis #0908-061

M Fabrikant & Sons Inc. v. Longs Jewelers Ltd.

Plaintiff debtor voluntarily filed for chapter 11. Subsequently, it filed a complaint against defendant alleging it sold defendant $ 2,815,911 in diamonds and jewelry. Debtor sought $ 1,647,031 for goods sold to defendant prior to the petition date. Defendant filed its answer and jury demand. In its answer, defendant asserted defenses and counterclaimed. Before the court was defendant's motion to withdraw the reference from the bankruptcy court.
Ruling: 
Debtor's action for breach of prepetition contract was a non-core proceeding for which withdrawal of reference was appropriate.
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Commercial case opionion summary, case decided on June 26,2008, LexisNexis #0708-128

D.A. Elia Constr. Corp. v. Damon & Morey LLP

Plaintiff, the former client of defendant law firm, commenced an action in state court against the law firm that had represented the client when it was a debtor in a complex chapter 11 reorganization. The complaint stated claims for legal malpractice and conflicts of interest. The law firm moved for summary judgment, asserting that all of the state law claims were barred by res judicata. The client moved to remand the case to state court.
Ruling: 
Legal malpractice action against chapter 11 debtor's counsel dismissed as resolved in original fee request proceeding.
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Commercial case opionion summary, case decided on March 31,2008, LexisNexis #0408-096

Hogil Pharm. Corp. v. Sapir (In re Innomed Labs LLC)

Appellants, a pharmaceutical corporation and one of its co-owners, challenged an order of the U.S. Bankruptcy Court authorizing appellee, a chapter 7 trustee of a debtor, to retain special legal counsel to investigate and possibly litigate claims by the debtor against appellants. Appellants argued that the law firm appointed as counsel to the trustee held interests adverse to the estate and was not disinterested.
Ruling: 
Law firm that previously represented co-owner of debtor LLC could represent trustee where co-owner did not hold adverse interest to estate.
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Commercial case opionion summary, case decided on January 29,2008, LexisNexis #0208-092