February 20, 2020, Central District of California – The Chapter 7 Trustee Jerry Namba, for the estate of now-defunct aircraft parts manufacturer Super98, LLC seeks to clawback about $6.3M from a Chicago based law firm, Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”) and about $2M from a litigation funder Bentham IMF 1 LLC (“Bentham”) for a claim the company pursued against Delta Airlines. Bentham provides commercial litigation funding for litigants and law firms.
In the complaint filed two days ago, the Trustee asserted that Debtor Super98 paid the law firm approximately $6 million with regards to a lawsuit against Delta Air Lines. The Trustee specifically asserted that Quinn Emanuel put an invalid lien on the money it received as a result of a confidential settlement in the Delta suit. The answer to the Trustee’s complaint is due by March 19, 2020. The status hearing is scheduled to be held on April 28, 2020.
By way of background, the Debtor was in the business of developing and selling “drag reduction” products designed to improve the fuel efficiency of certain McDonnell Douglas aircraft. According to the complaint, in September 2014, the Debtor and Delta Air Lines, Inc. entered into a contract that required the Debtor to manufacture and deliver drag reduction systems to Delta on a tight schedule. The Delta allegedly breached the contract and the Debtor filed a complaint against Delta in the United States District Court for the Northern District of Georgia, case no. 1:16-cv-1535 (the “Delta Litigation”). Quinn Emanuel principally represented the Debtor in the Delta Litigation.