• Stoppage Notices Have Chilling Effect on Liens of Secured Creditors
  • October 30, 2017 | Author: Eric J. Monzo
  • Law Firm: Morris James LLP - Wilmington Office
  • In March 1, 2017, the U.S. Bankruptcy Court for the District of Delaware issued an opinion denying three motions to dismiss filed by the debtors’ lenders in an adversary proceeding arising out of the Sports Authority cases.1The lenders sought dismissal of a complaint filed by O2Cool LLC,2 which sought damages including $608,130 representing the unpaid balance of stopped goods and related relief. The dismissal motions asserted that the complaint was filed after the deadline to file reclamation claims and § 503 (b) (9) claims, and after the court-ordered deadline to assert lien challenges pursuant to the final order approving the debtors’ debtor-in-possession (DIP) financing.