Page 10 - Delaware Lawyer - Winter 2022

FEATURE | FROM ‘BACKWATER’ TO LEADING AUTHORITY
Lewis Black, now retired from Morris, Nichols, Arsht & Tunnell, where he practiced corporate law, addressing a meeting of shareholders with the megaphone, assisted by Mike Houghton (right, back to the camera).
delphia, joined the Delaware Bank- ruptcy Court. During the late 1990s and early 2000s, Judges Walrath and Walsh continued to efficiently and effectively preside over the busiest bankruptcy docket in the country at the time.
In April 2005, Congress finally took steps to provide Delaware with additional judicial resources. In con- junction with passing the Bankrupt- cy Abuse Prevention and Consumer Protection Act of 2005, Congress approved four additional judgeships for the Delaware Bankruptcy Court — marking the end of the then vis- iting/rotating bankruptcy judge program that had been used to take some pressure off Judge Walrath and Judge Walsh.4 By the end of 2005, the Third Circuit Court of Appeals had filled all four judgeships.
But the volume of cases continued to expand, and out of necessity, so too did the size of the Bankruptcy Court bench. Currently, the Dela- ware Bankruptcy Court has eight members: Chief Judge Laurie Selber Silverstein, and Judges Mary Walrath, Christopher Sontchi, John Dorsey, Karen Owens, Brendan Shannon, J. Kate Stickles and Craig Goldblatt.
Improvements in Procedures and Technology
Legal practice among bankruptcy courts has been heavily influenced by the measures and practices long undertaken by the Delaware Bank- ruptcy Court, including (1) pioneer- ing the concept of emergency “first day” relief and practice; (2) incor- porating and more effectively us- ing technology (including being an early adopter of electronic filing and virtual dockets, as well as the use of telephonic and video appearances); (3) working with the bar, including through an annual review and com- ment period, to create consistent, uniform and workable local rules and
Another major development dur- ing this earlier period was the use of fast-track, prepackaged Chapter 11 plans (“prepacks”). One notable prepack case was the Memorex-Telex case filed in Delaware in 1992 (Case No. 92-08), with Judge Balick pre- siding. (At that time, she was still the only Delaware bankruptcy judge.) Before filing bankruptcy, Memorex- Telex negotiated a plan of reorgani- zation with its creditors and solicited their votes. With enough votes to confirm its plan, the debtor filed its bankruptcy case in early January 1992 and had a confirmed plan of reorga- nization just over a month later, in contrast to some Chapter 11 debtors who take years to emerge from bank- ruptcy.1 The shortened timeframe for prepacks typically means less time in a court-supervised Chapter 11 case, fewer costs, fewer risks, and less dis- ruption to the debtors’ business op- erations and trade relationships.
To illustrate the significant growth and prominence of the Delaware Bankruptcy Court during the 1990s, based on a 2002 ABI Journal analy- sis, the number of Chapter 11 cases filed in Delaware typically increased annually, with the most dramatic in- creases in the late 1990s. According to the ABI Journal, the percentage of Chapter 11 cases filed in Delaware as a proportion of all national Chap- ter 11 filings was only 0.5% in 1990, compared to 22.9% in 1999 (in 1990, there were 104 Chapter 11 filings in Delaware, while there were 2,106 such filings in 1999).2
In late 1993, Congress approved one additional bankruptcy judge for the District of Delaware. Peter J. Walsh, an experienced Chapter 11 practitioner, joined Judge Balick on the bench in October of that year. After Judge Balick retired in 1998,3 Judge Mary F. Walrath, who formerly practiced bankruptcy law in Phila-
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