Expect Scrutiny In Del. Bankruptcy-Alternative Proceedings

The Delaware Court of Chancery took the old maxim "justice delayed is justice denied" to heart recently, when it denied a request for a stay of proceedings hours after the request had been filed.

The ruling from Vice Chancellor Paul A. Fioravanti Jr., in In re: Kidbox.com Inc., is the latest in a series of rulings from the Court of Chancery requiring litigants in bankruptcy-alternative proceedings in Delaware to support their petitions for relief with sufficient disclosures, and to avoid bare-boned pleadings.

These rulings further signal that counsel engaged in bankruptcy-alternative proceedings in Delaware should be prepared for a higher level of scrutiny from the Court of Chancery.