Tuesday, November 3, 2015
From October 28, 2015 to November 2, 2015, Peter Kravitz, as Liquidating Trustee (“Liquidating Trustee”) of the RSH Liquidating Trust, filed approximately 375 actions (the “Avoidance Actions”) pursuant to Sections 547 and 548 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). There is no indication as to exactly how many Avoidance Actions there will ultimately be, but the total number could be impressive as the order approving ASK LLP as special counsel to prosecute the Avoidance Actions contemplates the hiring of contract attorneys to supplement ASK LLP’s own staff. [Docket No. 2606].
On February 5, 2015, RadioShack Corporation and sixteen affiliates (collectively, the “Debtors”) filed voluntary petitions in the Bankruptcy Court under Chapter 11 of the Bankruptcy Code. On April 1, 2015, the Bankruptcy Court entered an order approving the sale of certain of the assets of the Debtors and granting standing to the Creditors’ Committee to commence, prosecute, and compromise all of the Debtors’ and their estates’ claims and causes of action, including the Avoidance Actions. [Docket No. 1672]. Likewise, the Avoidance Actions were listed as Excluded Assets pursuant to the approved Asset Purchase Agreement (Article II, Section 2.2(g).)
On October 2, 2015, the Bankruptcy Court entered an order confirming the First Amended Joint Plan of Liquidation of RD Legacy Corporation and Its Debtor Affiliates (the “Plan”). [Docket No. 3067]. Article IV, Section C (1)(b) of the Plan transferred all causes of action and the standing to pursue said causes of action, including the Avoidance Actions, to the Liquidating Trust. The Plan became effective October 7, 2015. [Docket No. 3114].
The substance of the Complaints reviewed thus far is somewhat standard. The Preference Period is identified as November 7, 2014 through February 5, 2015. Plaintiff does assert fraudulent conveyance claims under Section 548, relying solely on the recitation of the statutory language. This is a practice that should just disappear as the case law in Delaware is clear that this does not meet the pleading standards. Plaintiff’s Exhibit A attempts to identify check numbers, check amounts, and the clear date, as well as the specific invoice information.
Prime Clerk, LLC is the claims agent for RS Legacy Corporation (f/k/a RadioShack Corporation).
General case information can be found at: https://cases.primeclerk.com/radioShack/Home-Index and the official ECF docket can be found on Bankruptcy Court’s website at: http://www.deb.uscourts.gov/.
ASK LLP is acting as Special Counsel to the Liquidating Trustee.
R. Grant Dick IV