Delta financial liquidating trust

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Sections 365(g) and 502(g), the court emphasized, do not actually affect the substance of a claim, but only specify when a given rejection damages claim arises.Therefore, the court concluded, section 553's preclusion of any Bankruptcy Code provision "affecting" a setoff right under applicable nonbankruptcy law is not meant to apply to sections 365(g) and 502(g).The plan called for the debtors to transfer certain property and rights, including the USE Notes, to a liquidating trust (the "Trust") created for the benefit of creditors.The trustee sued ICX for amounts allegedly due under the USE Notes, seeking, among other things, a declaratory judgment that ICX had no right of setoff based upon its contract rejection claim. In doing so, the court expressly rejected the approach articulated in determined that the obligation asserted to give rise to a right of setoff did not even constitute a debt, such that it could not be a claim in bankruptcy, the court's conclusion with respect to the setoff issue was nothing more than dicta.Four months afterward, CDI and six of its affiliates, including TVC(collectively, the "debtors"), filed for chapter 11 protection in Delaware.ICX expressed concern about TVC's ability to comply with the distribution agreement.According to ICX, the secured claim represented the portion of its rejection damages subject to setoff against the sums it owed the debtors under the USE Notes.

In the opinion written by Judge Aiken, the recent Oregon Court of Appeals decision in _Niday v.No other court has followed Delta's pronouncements concerning the invalidity of setoffs involving contract rejection claims.HERO Liquidating Trust On December 2, 2016, the Debtors’ Modified Joint Prepackaged Chapter 11 Plan (Incorporating Mediation Settlement) of Hercules Offshore, Inc. A creditor's ability in a bankruptcy case to exercise rights that it has under applicable law to set off an obligation it owes to the debtor against amounts owed by the debtor to it, thereby converting its unsecured claim to a secured claim to the extent of the setoff, is an important entitlement.Setoff rights are generally preserved in a bankruptcy case under section 553 of the Bankruptcy Code.

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