On on July 15, 2011, George L. Miller, Chapter 7 Trustee in the Lang Holdings, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 36 complaints in the District of Delaware .
Adversary Proceedings Overview
Lead Bankruptcy Case Name (Case Number): Lang Holdings, Inc. (09-12543)
Bankruptcy Court District (Division): District of Delaware
Petition Date: Chapter 11 petitions were filed on July 16, 2009; the cases were converted on November 25, 2009
Associated Cases: The Associated Debtors are: LH Winddown, Inc. (f/n/a Lang Holdings, Inc.); LH Winddown Sub 1, Inc. (f/n/a/Turner Acquisition, Inc.); LH Winddown Sub 2, Inc. (f/n/a Avalanche Publishing Acquisition, Inc.); LH Winddown Sub 3, LLC (f/n/a The Lang Companies, LLC); LH Winddown Sub 4, Inc. (f/n/a Avalanche Publishing, Inc.); and LH Winddown Sub 5, Ltd. (f/n/a the Lang Store, Ltd.)
Plaintiff: George L. Miller, Chapter 7 Trustee
Number of Proceedings: 36
When Filed: on July 15, 2011
Adversary Proceeding Judge: Chief U.S. Bankruptcy Judge Kevin J. Carey
Plaintiff's Counsel: Ciardi Ciardi & Astin, P.C. (Wilmington, DE) through its attorney Shannon D. Leight
Avoidance Period: The complaint identifies the preference period as the period "[o]n or within 90 days prior to the Petition Date".
The Complaints
The complaints do not meet the pleading standard previously applied by Judge Carey. However, the Trustee has taken extra effort to plead facts (including an attempt to incorporate the first day motion declaration) regarding the nature of the Debtors' business and its relationship with trade creditors. For this reason, it is unclear whether the Trustee is engaging in a "plead thin and amend" strategy or is trying to carve out a new pleading standard for preference complaints based on inference of antecedent debt solely from pleading the debtors' relationship with the defendants. A "plead thin and amend" strategy would require the Trustee to have access to the facts necessary to amend the complaints to identify the antecedent debts. Given the factual background of the Debtors' bankruptcy cases, there is reason to doubt that the Trustee has access to this information. Motions to dismiss in these adversary proceedings deserve close attention.
Related Materials:
- CADDJ APScans Report of Complaints, Answers, Dismissals, Defaults and Judgments in the Lang Holdings, Inc. Bankruptcy Preferential Transfer Recovery Adversary Proceedings
- To see a current APScans report of substantive filings made in the last 7 days, click this link.
- Sample Complaint in the Lang Holdings, Inc. Bankruptcy Adversary Proceedings