LJN Newsletters

Who's moving where; who's doing what.

Recent rulings of interest to you and your practice.

Last month, tha authors noted that on Oct. 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ('BAPCPA') was implemented without the collapse of the bankruptcy world as we knew it. They discussed the 'changes' to ' 303, and several key cases. This article continues the discussion.

The Third Circuit, on March 30, 2007, affirmed a district court judgment dismissing a $500 million fraudulent transfer and breach of fiduciary duty suit against Campbell Soup Co., the former parent of Vlasic Foods International ('VFI' or the 'debtor'). VFB, LLC v. Campbell Soup Co., 2007 WL 942360 (3d Cir. 3/30/07). VFI's creditors, acting through the reorganized entity, known as VFB, claimed that Campbell's March, 1998 $500 million stock sale (or 'leveraged Spin') of its Specialty Foods Division (including subsidiaries such as Vlasic (pickles) and Swanson (TV dinners)) to VFI, a newly formed, wholly owned subsidiary, was a fraudulent transfer because VFI did not receive reasonably equivalent value and because its $500 million payment rendered it insolvent and under-capitalized. The Third Circuit, however, held that the District Court had properly found the Division acquired by the debtor to be 'worth well in excess' of the $500 million purchase price, and that the debtor was solvent at the time of its 1998 purchase. Relying on the District Court's market capitalization

In a case of significance to the secondary loan and distressed claim market, a North Carolina state court has entered an 'anti-suit injunction' barring a group of secondary, secured debt holders (the 'Fund Defendants'), from commencing any actions against Wachovia Bank. The case, Wachovia Bank, NA and Wachovia Capital Partners, LLC v. Harbinger Capital Partners, et al, Civ. Action No. 07-CVS-5097, is pending in the General Court of Justice, Superior Court Division (Mecklenburg, NC) (the 'State Court Anti-Suit Action'), but its parties and the underlying facts arise from the Chapter 11 case of In re Le-Nature, Inc., pending in United States Bankruptcy Court, Western District of Pennsylvania (the 'Bankruptcy Case').

Recent rulings of importance to you and your practice.

Who's moving where, who's doing what.

For a number of reasons discussed below, employers truly interested in turning back the clock on the 1991 amendments to Title VII would be well served to cease using mandatory arbitration agreements and instead have their employees execute waivers of their right to jury trials. It is juries that employers generally fear, not the courts themselves. Prior to the 1991 amendments, employers felt no imperative to exempt themselves from the civil justice system available in the courts. Thus, employers do not now need to flee the court system altogether in order to avoid jury trials, and there is certainly no reason for them to require their employees to agree to the wholesale replacement of court litigation with mandatory arbitration.