Vendor’s Reclamation Rights Survive Lien of Post-Petition DIP Loan [Delaware Business Court Insider]

Mark Felger, chair of Cozen O’Connor’s Bankruptcy, Insolvency & Restructuring Practice Group, and Barry Klayman, a member of the firm’s Bankruptcy, Insolvency & Restructuring Practice Group, discuss a recent Delaware bankruptcy court decision in The Delaware Business Court Insider. In In re Reichhold Holdings U.S., Inc. Judge Mary F. Walrath upheld the validity of a vendor’s administrative claim for its reclamation rights under Section 546(c) of the Bankruptcy Code as against a post-petition DIP lender. The case is significant because Walrath’s decision did not follow the results of similar cases from the Bankruptcy Court in the Southern District of New York, effectively breathing “new life” into vendors’ state-law reclamation rights in bankruptcy.

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Mark E. Felger

Co-Chair, Bankruptcy, Insolvency & Restructuring

(302) 295-2087

Barry M. Klayman


(302) 295-2035

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