Preference Actions Filed in Draw Another Circle Bankruptcy

On June 15, 2017, Curtis R. Smith, as Liquidating Trustee of the Hastings Creditors’ Liquidating Trust, filed approximately 69 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and and 550 of the Bankruptcy Code.   View Full Post
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The Original Soupman, Inc. Files for Chapter 11 Protection in Delaware

On June 13, 2017, The Original Soupman, Inc. and its affiliates (collectively “Debtors” or “Original Soupman”) commenced voluntary bankruptcy proceedings under Chapter 11 of the Bankruptcy Code.  According to its petition, Original Soupman estimates that its assets are between $1 million and $10 million, and its liabilities are between $10 million and $50 million. View Full Post
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Sections 204 and 205 of the DGCL Cannot Remedy Unauthorized Corporate Acts

By | Delaware Chancery Law Blog | June 11, 2017
In a matter of first impression, the Court of Chancery considered whether an “unauthorized” act–one that the majority of stockholders entitled to vote deliberately declined to authorize–but that the corporation nevertheless determined to pursue, may be deemed a “defective corporate act” under Section 204 that is subject to later validation by ratification of the stockholders via Section 205 of the DGCL. View Full Post
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Chancery Appraises Corporation Below Merger Price Due to Synergies

In a recent appraisal action before the Court of Chancery, In re Appraisal of SWS Group, Inc.C.A. No. 10554-VCG (Del. Ch. May 30, 2017), Vice Chancellor Glasscock found that the fair value of the acquired entity, SWS Group, Inc., (“SWS” or the “Company”), was less than deal price as a result of synergies between SWS and the acquiring company, Hilltop Holdings, Inc. View Full Post
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Tidewater, Inc. Bankruptcy Update – Utilities Motion

On May 17th, Tidewater, Inc. and its affiliated debtors (“Tidewater” or “Debtors”) filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware. On the same day, the Court entered an Interim Utilities Order (click here), which among other things sets forth deadlines for utility providers to object to the proposed adequate assurance procedures or the amount of adequate assurance.   View Full Post
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Derivative Demand Requirements Equally Apply to Actions Asserted by 50/50 Member of an LLC

In Delaware, to assert a derivative action against company management, either a presuit demand must be made, or plaintiff must allege that demand would be futile because the board is not disinterested.   For derivative actions asserted by shareholder against a corporation or of an unincorporated association, Court of Chancery Rule 23.1 requires that the complaint “allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority and the reasons for the plaintiff’s failure to obtain the action or for not making the effort.”  Ct. View Full Post
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Corinthian Colleges Preference Actions Filed in Delaware Bankruptcy Court

Starting on April 28, 2017, Craig R. Jalbert, as Distribution Trustee of the Corinthian Distribution Trust, filed approximately 122 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548, 549 and and 550 of the Bankruptcy Code (depending upon the nature of the underlying transactions).   View Full Post
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