Del. Judge Rejects Stockholder Call To Dismiss Pace Ch. 11

By Jeff Montgomery (May 5, 2020, 2:50 PM EDT) -- In a potential first, a bankruptcy judge in Delaware on Tuesday refused to dismiss Pace Industries' Chapter 11 case on the demand of a shareholder who claimed a negotiated blocking right, saying approval would ignore both shareholder fiduciary duty and the debtor's constitutional rights.

U.S. Bankruptcy Judge Mary F. Walrath said she was aware that there was no case on point in the dispute over Macquarie Septa I LLC's claim that the parent of Pace gave Macquarie a right to approve or veto bankruptcy or liquidation filings in exchange for a more than $37 million share purchase.

"I think that, based...

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