Cybergenics: En Banc Restores the Status Quo by Allowing Creditors' Committees to Pursue Derivative Claims
Written By Berry D. Spears and C. Mark Brannum

In October 2001, unsecured creditors' committees around the country got a scare when the United States District Court for the District of Delaware issued an opinion in the Cybergenics case. The District Court’s opinion reversed the Delaware Bankruptcy Court and held that the Cybergenics creditors' committee lacked standing to bring fraudulent transfer claims under Section 544(b) of the Bankruptcy Code. Even more surprising was the Third Circuit's subsequent affirmation of the District Court’s decision. As might be expected, these decisions set a dangerous precedent and threatened to eliminate a potentially valuable arrow from the quiver of unsecured creditors' committees.
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To Claim Or Not To Claim
Written By David B. Wheeler

When involved in a chapter 11 case, creditor’s counsel will often advise, and many credit managers will often file, proofs of claim for the amount due the creditor regardless of whether the claim amount already specified by the debtor in its schedules approximates or is identical to the amount the creditor’s records show as being due. The primary reason for filing a claim under such circumstances is “to be on the safe side”. A recent decision from the bankruptcy court in Delaware underscores the need to evaluate such a policy in the face of legal rights that may be surrendered as a result.
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Overcoming Obstacles To Unsecured Creditors Committee Participation
Written By Joseph Myers

Today’s corporate credit executive faces many challenges. Topping the list is finding a means of accepting orders so as to build top-line sales and improve overall profitability, without increasing debt. Continuing to function efficiently given the fact that a majority of firms, because of corporate downsizing, put their credit/accounts receivable departments in the “overhead” category is another example. Such departments are over-utilized, understaffed and, in most cases, comprised of personnel who are significantly underpaid.
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WLC Committee Highlights

Deborah Thorne has put together an outstanding program for the upcoming UTC Meeting at the upcoming Winter Leadership Conference in La Quinta, Calif., Dec. 4-6. There will be a panel presentation and discussion concerning unsecured trade creditor issues arising in the K-Mart Case.

The participants will include Keith Shapiro of Greenburg Traurig. Keith is a former ABI president and sat on the Kmart Committee. Also participating will be Larry Lattig of KPMG LLP. Larry's firm served as financial advisors to the committee. Another committee member, Ms. Unju Paik, VP - Legal Affairs, Twentieth Century Fox, will also be a part of the panel. Among the issues to be discussed will be critical vendor, consignment, confidentiality and governance issues for the committee, credit insurers' role, "Stay or Go" and the sale of claims, waiver of preferences, fraud investigations and professional fees. This will be an opportunity to discuss these and many other issues facing committees in mega cases.

There will be a discussion of ongoing UTC projects. The UTC always welcomes the ideas of its members with respect to new projects and publications, including articles for the UTC Newsletter.

I look forward to seeing you in the desert.

- Dave Wheeler