The following is a summary of a Minnesota bankruptcy case or a case relevant to Minnesota bankruptcy law.
Minnesota Bankruptcy Case:
Polaroid Corp. v. Ritchie Capital Management, LLC (In re Polaroid Corp.), ADV 09-4032 (Bankr. D. Minn. 12/04/09)) (Kishel, J.).
The Polaroid plaintiffs, as chapter 11 debtors-in-possession, commenced an adversary proceeding against the Ritchie parties, a prepetition secured lender. They sought, among other relief, to avoid or otherwise nullify the Ritchie parties’ liens, on the theory that the taking of the security interests constituted fraudulent transfers as to the Polaroid plaintiffs’ creditors. The Ritchie parties asserted two counterclaims: first, for a declaratory judgment that their security interests in various assets of the Polaroid plaintiffs are valid and enforceable; second, a declaratory judgment that they have a valid and perfected security interest in several notes to related entities, and a declaration that those security interests are valid claims and liens enforceable against Polaroid in accordance with their terms.
The plaintiffs later converted to chapter 7. The Polaroid plaintiffs moved to dismiss the counterclaims. The bankruptcy court found that the Polaroid plaintiffs had failed to articulate a theory to support dismissal of the first count under FRCP 12(b)(6). However, the bankruptcy court found that the Ritchie parties’ second counterclaim could not proceed because they lacked standing on one of the two components of the second prong of their counterclaim, and therefore had failed to state a claim on which relief might be granted. The bankruptcy court ordered the dismissal of the second count of the Ritchie parties’ counterclaim, but allowed the first count to proceed.
Credit: The preceding was a summary of a case relevant to Minnesota bankruptcy law. The case summary was prepared by the U.S. Bankruptcy Court through Judge Robert J. Kressel & attorney Faye Knowles.