Bulso PLC Client Prevails in Delaware Bankruptcy Dispute

Defendant’s effort to block Tennessee tortious-interference suit fails.

The United States Bankruptcy Court for the District of Delaware recently ruled in favor of Bulso PLC client BNA Associates LLC and against a Goldman Sachs subsidiary on a motion brought in that court to enjoin a lawsuit Bulso PLC filed in Tennessee against the subsidiary.

BNA Associates, a hospitality company operating boutique hotels, sought to purchase a long-term lease of a lodge-type property in East Tennessee from Ruby Tuesday. A Goldman Sachs subsidiary to which Ruby Tuesday owed money, however, blocked the transaction. When Ruby Tuesday filed Chapter 11 bankruptcy (in Delaware) soon thereafter, the Goldman Sachs entity wound up with indirect ownership of the lease through the confirmed plan.

Bulso PLC filed suit against the subsidiary on behalf of BNA Associates, claiming tortious interference with the opportunity to acquire the lease. The subsidiary, in turn, filed a motion in the Delaware bankruptcy court asking it to enjoin that suit as an improper interference with the confirmed bankruptcy plan and associated orders. BNA Associates resisted that request, arguing that neither the order confirming the plan, nor findings made therein, nor the plan itself barred the suit against the subsidiary: the bankruptcy orders and occurrences were focused on Ruby Tuesday and, at their broadest, Ruby Tuesday’s interactions with its creditors. Because BNA Associates was not a creditor and did not participate in the discussions between the creditors and Ruby Tuesday, the bankruptcy court did not make findings pertaining to its claims. And because BNA Associates could not practicably have litigated its tort claims against the subsidiary in the bankruptcy case, it did not forfeit its chance to do so by not raising those claims in the bankruptcy case.

The bankruptcy court agreed, finding each of the subsidiary’s arguments unpersuasive and denying the motion in full. The case is In re RTI Holding Company LLC, No. 20-12456 (Bankr. D. Del.). The bankruptcy court’s opinion is available at 2021 WL 494414.

BNA Associates was represented in the bankruptcy proceeding by Bulso PLC attorneys Eric Smith and Paul Krog and Faegre Drinker attorneys Brett Fallon and Jaclyn Marasco. Paul Krog argued the motion against Goldman Sachs’s attorneys from Cleary Gottlieb.