Del. Bankruptcy Court Halts All Non-'Time-Sensitive' Hearings

By Rose Krebs
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Law360 (March 16, 2020, 6:04 PM EDT) -- The Delaware Bankruptcy Court's chief judge on Monday said the court is halting all non-"time sensitive" proceedings until at least April 15, the latest coronavirus-related scheduling impact on one of the nation's busiest bankruptcy courts.

In a general order posted on the court's website, U.S. Bankruptcy Judge Christopher S. Sontchi said "all hearings, status conferences, trials, and any other matters scheduled to be held in open court that are not time sensitive are continued to a date to be determined on or after April 15, 2020."

Judges presiding over bankruptcy cases will "determine on a case by case basis" what proceedings are deemed to be time-sensitive, the order said.

Also, unless otherwise ordered by the presiding judge, all court hearings held prior to April 15 will be held via telephone or video conference, according to the order.

Presiding judges will also determine on a case-by-case basis how evidence will be submitted for hearings that are held via telephone or video conference before April 15.

Chapter 13 confirmation hearings scheduled for March 23 will occur in person as scheduled, but March 24 Chapter 13 proceedings will be held via telephone, the court said. Debtors represented by counsel in the March 23 matters are "encouraged" not to attend.

The court was busy at work Monday rearranging hearings in a continuing, and ever-changing, effort to keep the First State's busy bankruptcy caseload moving forward.

Among cases with upcoming hearings scheduled as the court continues to shuffle its calendar is a planned April 2 confirmation hearing for pharmaceutical company Melinta Therapeutics Inc.'s Chapter 11 plan.

RAIT Funding LLC had been scheduled for a hearing this week to consider a planned $142 million distribution to unsecured creditors in its Chapter 11, but that has been moved to March 31, according to court records.

Diabetes drug technology company Valeritas Holdings Inc., which cited the coronavirus outbreak's impact on its Chinese factories for its bankruptcy, is slated for a hearing Friday to approve the $23 million sale of its assets to a stalking horse bidder, the Denmark-based Zealand Pharma AS.

According to a court filing Friday, an auction planned for Tuesday was canceled because there were no other bidders. There was no filing as of Monday evening to indicate the status of Friday's hearing.

Also on Friday, a hearing is slated to continue in Judge Sontchi's court to consider bankrupt home furnishing retailer Art Van Furniture's deal with liquidators.

Last week, the judge raised concerns about the intertwined relationship between the proposed liquidation consultant — a joint venture of Hilco Merchant Resources and Gordon Bros. Retail Partners — and the holders of Art Van's $175 million in prepetition secured term loans as the debtor prepares to close down more than 120 stores. He said the sales could go on, but without the benefit of the consultant.

There was nothing yet filed on the docket as of Monday evening to indicate Friday's hearing has yet changed.

--Editing by Bruce Goldman.

Update: This story has been updated with more information about upcoming court hearings.

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