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Delaware Bankruptcy Court Weighs in on Creditor Groups' Disclosure and Possible Fiduciary Obligations

December 18, 2009 Full PDF

The Bankruptcy Court for the District of Delaware recently found a group of noteholders to be akin to an "ad hoc" committee and as such subject to the disclosure requirements of Bankruptcy Rule 2019. Bankruptcy Rule 2019 requires the filing of a verified statement setting forth, among others, (1) the names and addresses of the members of the group; and (2) the nature and amount of the claims or interests held, the time of their acquisition, the amounts paid for them, and any sales or other disposition of the claims or interests. The Court further labeled as "erroneous" the noteholders' group assumption that it owed no fiduciary duties to other similarly-situated creditors, either in or outside the group.

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