Barry M Klayman

March 28, 2012 | Delaware Business Court Insider

In In re Majestic Star Casino LLC , U.S. Bankruptcy Court Judge Kevin Gross of the District of Delaware answered a question of first impression: whether a nondebtor parent's revocation of its S corporation status, which, subsequently, by operation of the Internal Revenue Code revoked the debtor-subsidiary's "qualified Subchapter S subsidiary" (QSub) status, is an avoidable transfer of estate property in violation of Bankruptcy Code §549. The court answered the question in the affirmative, voided the parent corporation's revocation of its Subchapter S status and the termination of the subsidiary corporation's QSub status, and directed the defendants to take all actions necessary to restore the subsidiary corporation's QSub status and to return all sums paid by the subsidiary as a result of the termination of its QSub status.

By Barry M. Klayman and Mark E. Felger

8 minute read

February 13, 2013 | Delaware Business Court Insider

In WM Inland Adjacent LLC v. Mervyn's LLC , Adv. Pro. No. 09-50920 (KG) (Del. Bankr. Jan. 8, 2013), the U.S. Bankruptcy Court for the District of Delaware faced a question of first impression: whether a claim arising from an indemnification provision in a nonresidential commercial lease with the debtor, which the debtor rejected post-petition, was entitled to administrative priority under §365(d)(3), or was a pre-petition, general unsecured claim under §502(g).

By Barry M. Klayman and Mark E. Felger

6 minute read

February 08, 2012 | Delaware Business Court Insider

Section 548 of the Bankruptcy Code allows a trustee in bankruptcy to avoid certain "fraudulent transfers" of the debtor's property if they occurred within two years before the date of the bankruptcy filing. In Industrial Enterprises of America Inc. v. Burtis , Bankruptcy Court Judge Brendan Shannon answers the question, "May § 548's two-year 'look back' period be equitably tolled, allowing transfers that occurred outside of that window to be avoided under § 548?" The court holds that it cannot, and in the process rejects case law to the contrary not only from other jurisdictions but also from Shannon's own prior inconsistent decisions.

By Barry M. Klayman and Mark E. Felger Special to the DBCI

5 minute read

October 26, 2011 | Delaware Business Court Insider

In the Aug. 31 case DFG Wine Co. LLC v. Eight Estates Wine Holdings LLC , the Delaware Court of Chancery considered the question of the right of a limited liability company member to inspect the books and records of the company's subsidiary. In this post-trial letter opinion, the court granted an LLC member the right to inspect certain books and records of the company's subsidiary even though neither the Delaware Limited Liability Company Act (LLC Act) nor the LLC agreement expressly give it that right.

By Barry M. Klayman and Mark E. Felger Special to the DBCI

6 minute read

September 21, 2011 | Delaware Business Court Insider

Earlier this month, in CML V LLC v. Bax , the Delaware Supreme Court held that a creditor of an insolvent limited liability company lacks standing under the Delaware Limited Liability Company Act to bring a derivative action against the LLC's former managers.

By Barry M. Klayman and Mark E. Felger Special to the DBCI

7 minute read

May 09, 2012 | Delaware Business Court Insider

Section 546(e) of the Bankruptcy Code has engendered more than its fair share of litigation. Section 546(e) provides a safe harbor to exempt certain types of financial contracts from the reach of the automatic stay and the avoidance powers of the code.

By Barry M. Klayman and Mark E. Felger

7 minute read