Commercial Litigation and Arbitration

Matter of First Impression vs. Baseless Position (Good Quote)

Reorganized Debtors. SC SJ Holdings, LLC v. Pillsbury Winthrop Shaw Pittman LLP ( In re SC SJ Holdings, LLC), 2023 U.S. Dist. LEXIS 48320 (Bankr. D. Del. March 22, 2023)

Debtors argue that § 1144 "is not applicable to" requests for relief where purported ethical violations give rise to late discovery of the basis for a request. (D.I. 21 at 26-29). This Court need not reach any factual issues in order to affirm the Bankruptcy Court's decision. The statute contains no exception for purported ethical violations, and the Bankruptcy Court did not err in declining to create [*29]  one out of whole cloth. (See 5/4/2022 Tr. at 80-81). Debtors insist this is a "matter of first impression." (D.I. 21 at 26). More accurately stated, there no authority for Debtors' argument that this Court should create an exception in derogation of the statute's plain text.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

(1) Appellate Review of Inherent Power Sanctions (7th Circuit): Factual Findings Reviewed for Clear Error, Choice of Sanction for Abuse of Discretion — 4-Element Test for Reversal; (2) Sanctions and Class Actions: Monetary Sanctions Properly Imposed on Defendants for Improper Communications with Class Members (Represented Parties) — “[I]f The Class And The Class Opponent Are Involved In An Ongoing Business Relationship, Communications From The Class Opponent To The Class May Be Coercive” (Good Quote); (3) Monetary Sanctions under Goodyear v. Haeger: If Same Fact-Gathering Would Have Been Conducted Absent The Misconduct, No But-For Causation — But Only “Rough Justice” Required, “Not Accountant-Like Precision” (Good Quote) — Once Misconduct Is Clear, Time Spent Ferreting It Out Compensable under Goodyear; (4) Goodyear Did Not Overrule Long-Standing Rule That Courts May Impose Modest Civil Monetary Sanctions to Curb Litigation Abuse; (5) Appellate Jurisdiction Lacking Where Sanctioned Attorney Fails to File Notice of Appeal and Lawyer’s Intent to Appeal Not Apparent from Client’s Notice; (5) Rule 11 Improper Purpose — Party May Have Many Purposes for Pursuing Claim — As Long As Claim Is Supported by Good Faith Belief in the Merits, “A Parallel Reason Does Not Violate Rule 11” — To Deny A Motion for Sanctions, The District Court Need Not Address Every Argument: “Arguments Clearly Without Merit Can, And For The Sake Of Judicial Economy Should, Be Passed Over In Silence” (Good Quote); Non-Monetary Sanction on Counsel: Complete Twice The Required Amount Of Professional Responsibility Hours For Her Next Continuing Legal Education Cycle Imposed By The State Bar

Archives