Movin' on Up, Finally! -- Long Overdue Selections to Delaware's Overworked Bankruptcy Court Announced

Last Wednesday, the Office of the Circuit Executive for the U.S. Court of Appeals for the Third Circuit selected four men to serve in the open slots finally created for Delaware's grossly understaffed Bankruptcy Court (which for nearly 15 years had been denied the addition of permanent judges primarily, in my view, because of fear by out-of-state lawyers/lobbyists that enhancing Delaware's ability to handle premiere cases would adversely impair their out-of-state, big city practices). The four are:

Kevin Gross, Rosenthal Monhait Gross & Goddess

Brendan Shannon, Young Conaway Stargatt & Taylor

Kevin Carey, Bankruptcy Judge of the Eastern District of PA

Christopher Sontchi, Ashby & Geddes

The Office of the Third Circuit Executive is now taking comments on the qualifications of these designates through December 1st, and decide soon thereafter. For those who know the candidates personally, I hope that you take the time to send in your comments.

The Bankruptcy In$ider had this to say about their backgrounds, Delaware's woefully understaffed bankruptcy bench, and the selection process generally:

The nominations arrived at the end of a lengthy vetting process. In June, a "merit selection committee" was appointed by the Judicial Council of the Third Circuit in order to choose candidates for the four open slots. After the committee was formed, the vacancies were made public and circulated within the Delaware bankruptcy bar. Applications were received, and interviews of applicants followed. The Judicial Council then forwarded its recommendations to the Third Circuit.

In a statement issued Wednesday by the Circuit, the court wrote: "Having considered the Judicial Council's recommendations, the U.S. Court of Appeals has found [the four nominees] to be most qualified and are, at present, considering their appointment to the bankruptcy judgeships."

Nationally, 28 new bankruptcy judgeships need to be filled, including the ones in Delaware.

The posts were created as part of the bankruptcy reform package passed by Congress earlier this year that took effect Oct. 17, though work on finding judges started well in advance of that date.

For Delaware, more judges have long been overdue.

The district, which has long been a favored place of filing for debtors involved in big, complex bankruptcies, currently has only two permanent bankruptcy judges, Judge Peter J. Walsh and Chief Judge Mary F. Walrath. For several years, however, U.S. District Judges in Wilmington were pressed into duty on bankruptcy cases or the court had to resort to inviting visiting judges from all over the nation to sit on the bench for six-month stints.

"It was less than ideal," said Jones about the visiting-judge system. "A lot of the cases that got handed from one judge to another lost a lot of continuity."

In fact, Carey, one of the nominees, put in a visiting-judge term in Delaware and oversaw the bankruptcies of Exide Technologies Inc. and Touch America Inc. in that capacity.

According to www.BankruptcyInsider.com, Brendan Shannon had 23 active assignments as of September, including serving as counsel to Silver Point Finance LLC in the aaiPharma Inc. case and debtor counsel to Pharmaceutical Formulations Inc. Just recently he was tapped to handle the last-minute negotiations for Gujarat Glass Ltd., an Indian glass bottle making company that made a dramatic (and successful) eleventh-hour bid for assets owned by Millville, N.J.-based Glass Group Inc.

Kevin Gross is the lead bankruptcy partner at Rosenthal Monhait, a firm perhaps known more for shareholder litigation practice than its bankruptcy practice. According to www.BankruptcyInsider.com, Gross worked on two 2001 cases, representing noteholders in the Borden Chemicals and Plastics LP one and represented interested parties in Epic Capital Corp.'s proceedings. Still, Gross is well-known in the clubby Wilmington bankruptcy circles as one of the area's most respected bankruptcy mediators.

Sontchi, meanwhile, is listed as having five active cases as of September, with assignments in the bankruptcies of Trenwick America, the U.S. subsidiary of Bermuda-based reinsurer Trenwick Group Ltd.; Meridian Automotive Systems Inc.; Stone & Webster Inc.; and VecTour Inc. The Ashby & Geddes Web site notes that Sontchi, after graduating from the University of Chicago Law School, served as a judicial clerk to Peter Walsh's brother, Joseph Walsh of the Delaware Supreme Court, in 1992.

Steve Jakubowski

© Steve Jakubowski 2005

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