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Chancery Freezes Highland Capital Cases Until Ch. 11 Done
Law360 (March 10, 2021, 8:52 PM EST) A Delaware Chancery Court judge stayed a pair of fraudulent transfer cases in her court Wednesday, saying the Texas Chapter 11 case of investment firm Highland Capital Management needs to be resolved before damages in Delaware can be properly addressed.
During a hearing conducted via telephone conference, Vice Chancellor Morgan T. Zurn said plaintiff Patrick Daugherty had signed on to a settlement with the bankruptcy investment firm in Texas and will be receiving millions of dollars in recoveries once that case is finalized and the Chapter 11 plan goes into effect.
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“I don’t get no respect” was a famous Rodney Dangerfield comedy routine. It also could be ascribed albeit less comedically to tiebreakers assigned the often thankless task of resolving deadlock between 50/50 owners or managers of closely held business entities. If the deadlock concerns a heated, major issue, the tiebreaker’s vote favoring one of the two factions is likely to alienate and sow mistrust or worse in the other. Or, if prior to putting a decision in the tiebreaker’s hands, faction #1 perceives that the tiebreaker has developed a bias favoring faction #2, faction #1 may seek to remove or otherwise disenfranchise the tiebreaker.