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A New York Bankruptcy Court Declines to Apply the Earmarking Defense to the 11 U.S.C.S. § 549 Claim Because the Transfer in Question Was Not Subject to a Clear Obligation to Pay Defendants

January 29, 2019, New York – On June 1, 2009, Debtor General Motors, Inc. (GM) and certain of its subsidiaries filed voluntary Chapter 11 petitions in the bankruptcy court. GM also filed a motion seeking authority to obtain over $33 billion in post-petition DIP financing from the U.S. and Canadian …

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The Relevant Question Under Sec 547 (c) (2) is not Whether the Transactions were Ordinary with Respect to Some Objective Standard in the Industry, But Whether They Were Consistent with the Course of Dealings Between the Particular Parties

January 25, 2019, New York – Prior to its bankruptcy, Debtor Goodnight Sleep Store, Inc. operated four retail stores and sold beds, mattresses, and related products. By mid-2016, Goodnight was unable to meet its operational costs as they came due and had also fallen significantly behind in paying quarterly payroll …

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A Pennsylvania Court Denies the Defendant’s Motion to Dismiss Because a Trustee Sufficiently Pleaded the Elements of a Constructive Fraudulent Conveyance Under § 548(a)(1)(B)

January 7, 2019, Pennsylvania – Debtor Mechanicsburg Fitness, Inc. was formed, among other things, to operate as a fitness center in Pennsylvania (the “Fitness Center”). To facilitate its stated purpose, the Debtor entered into a lease with Capital Plaza Associates (“Landlord”) for the use of the real property located in …

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A Nebraska Bankruptcy Court Considers Sale vs Loan Analysis of an Agreeement in a Preference Action

January 3, 2019, Nebraska – Debtor Cornerstone Tower Services, Inc. was engaged in the business of erecting and maintaining communication towers, such as cell phone towers. On March 18, 2016, 54 days prior to Cornerstone’s bankruptcy filing and within the 90-day preference period, the Debtor entered into a “Payment Rights …

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Disputed Issues of Fact As to Whether Transfers Were Made in a Similar Manner to Transfers Made Prior to the Preference Period Precluded Judgment in Favor of the Defendant

January 1, 2019, Northern District of Georgia – The Debtors Clayton General, Inc. f/k/a Southern Regional Health System, Inc. d/b/a Southern Regional Medical Center, et al., were a family of healthcare providers servicing residents of Clayton County, Georgia and others throughout the Atlanta metro area through hospital, outpatient clinic, and …

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To Assure the Effectuation Under Section 502 (d), the Claim May be Disallowed Temporarily and Subject to Reconsideration

December 17, 2018. Alaska – Debtor Jessica Giroux, objected to proof of claim under 11 U.S.C. § 502(d), alleging that certain pre-petition payments made to the claimants, Philip, and Rebekah Johnston, constituted fraudulent and preferential transfers that have not been repaid. Brad Giroux (Jessica’s husband) and co-claimant Philip Johnston were partners in …

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Summary Judgment In Favor of Trustee for the Transfers Made to a Debtors’ Daughters for College Expenses After They Reached the Age of Majority

December 4, 2018, New York – The Chapter 7 Trustee, Robert L. Geltzer sought to recover as constructively fraudulent transfers amounts paid by the Chapter 7 co-debtors, Luba Pincus and Bruce Sterman (the “Debtors”), to or for the benefit of their two daughters, Defendants Alexandra Sterman and Samantha Sterman, allegedly …

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Trustee Janet Northrup Initiates Preference Lawsuits in Bennu Oil & Gas, LLC Bankruptcy Case

December 2, 2018 – Janet S Casciato-Northrup, the Chapter 7 Trustee in Bennu Oil & Gas, LLC bankruptcy recently initiated about thirty (30) preference actions against various defendants, seeking the avoidance and recovery of allegedly preferential and fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. Two …

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A Defendant Individual Could Not Hide Behind Corporate Fictitious Name to Avoid Potential Liability for Prepetition Transfers

December 1, 2018, Northern District of Texas – Debtor BFN Operations LLC ran a profitable wholesale nursery business until 2016  when unanticipated inclement weather damaged its plant inventory and led to reduced sales. At the same time, the Debtor faced a prescheduled reduction in its pre-petition credit agreements borrowing base. …

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Delaware Bankruptcy Court : It is Improper for a Plaintiff to Raise Allegations for the First Time in His Opposition Brief to a Motion to Dismiss

November 14, 2018, Delaware – On January 27, 2016, Debtors Liquid Holdings Group, Inc. and Liquid Prime Holdings, LLC filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Before the Petition Date, Debtors and Defendant Gibson Dunn & Crutcher LLP entered into business agreements, under which the …

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