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Quantum Foods – Opportunity For Leave to Amend a Complaint be Freely Given

Official Comm. of Unsecured Creditors of Quantum Foods, LLC v. Indep. Purchasing Coop., Inc. (In re Quantum Foods, LLC), Nos. 14-10318 (KJC), 25), 2016 Bankr. LEXIS 2968 (U.S. Bankr. D. Del. Aug. 9, 2016)

Debtor Quantum Foods, LLC filed for voluntary Chapter 11 bankruptcy petition and the Committee was appointed which commenced an adversary proceeding against Defendant Independent Purchasing Cooperative, Inc. (IPC) to avoid and recover transfers made by Quantum Foods to IPC in the total amount of $2,223,060.65 pursuant to §§547(b) and 550 of the Bankruptcy Code. IPC filed a motion to dismiss and the Committee filed a response opposing the motion.

The Court found that the Committee’s complaint did not state sufficient facts to support the claims for avoidance and recovery of a preferential payment or for disallowance of claims because the complaint did not provide any details about the antecedent debt which the transfers satisfied such as the relationship between the parties, the identity of any contracts or agreements between the parties, or any description of the goods or services exchanged. The Court also found that although the elements of causes of action under §547(b) and §502(d) were stated in the complaint; they were only a few vague factual allegations. However, the Court still granted an opportunity to the Committee to amend its complaint and provide more specific information. The Court reasoned that a leave to amend a complaint should be freely given when justice so required.


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