The right evaluation 5. This could be a picture on the chart, or a case number that is both on his chart and wristband.
The foxmeyer drugs bankruptcy was it States Bankruptcy Court, D. Kate Stickles, Jeremy W. The Court rules as it does for the reasons set forth below. The Court, as recounted in its November 19, decision, understands the Trustee to argue that the Defendants engaged, as transferees, in one integrated transfer of property on June 19,from, argues The foxmeyer drugs bankruptcy was it Trustee, both Fox Drug and Fox Corp.
Therefore, if the transfers that comprised the June 19, Transactions are integrated — which issue presently remains open for resolution — and Fox Drug and Fox Corp.
However, and assuming the applicability of such integration, if Fox Drug and Fox Corp. The reason why, absent a combination of Fox Drug and Fox Corp.
Because the issue of whether Fox Drug and Fox Corp. The Court held as well, and as set forth on the first page of the instant Memorandum and Order of Court, that the combination of Fox Drug and Fox Corp. The Defendants vigorously disagree and argue instead that no basis exists for a piercing of the corporate veil in the instant adversary proceeding.
As an initial matter, the Court holds that the corporate veil which the Trustee formally seeks to pierce is that of Fox Drug and not that of Fox Corp. See Pauley Petroleum Inc. Guidant Corporation, F. The Court also notes at the outset that the Trustee brings his request for veil piercing so that the assets of Fox Drug and Fox Corp.
Combining the preceding observations and holdings, the Court concludes that the Trustee wishes to pierce the corporate veil of Fox Drug so that a Fox Drug's assets may be viewed, as of June 19,as having been owned by Fox Corp.
The parties agree, and the Court sees no reason to disagree, that the law of Delaware governs the question of whether Fox Drug's corporate veil should be pierced. See Joint Pretrial Order, at pt. However, the parties disagree as to the test that is to be applied for determining whether a corporate veil should be pierced under Delaware law.
The Trustee cites to several cases, including, inter alia, Fletcher v. Delaware Valley Broadcasters, Inc. The Court does not understand the Defendants to disagree with the first prong of the two-prong test set forth in Fletcher, which prong encapsulates the list of factors typically to be considered when undertaking a corporate veil-piercing analysis, to wit factors which reveal how the corporation operates and the particular defendant's relationship to that operation.
These factors include whether the corporation was adequately capitalized for the corporate undertaking; whether the corporation was solvent; whether dividends were paid, corporate records kept, officers and directors functioned properly, and other corporate formalities were observed; whether the dominant shareholder siphoned corporate funds; and whether, in general, the corporation simply functioned as a facade for the dominant shareholder.
However, with respect to the second prong of such test, the Defendants maintain that a corporate veil may only be pierced under Delaware law upon a showing  that the corporation whose veil is to be pierced was "a sham and exist[ed] for no other purpose than as a vehicle for fraud.
Thus, the Defendants argue that fraud or a sham must be shown rather than mere injustice or unfairness before a court may pierce a corporate veil.
The Court, upon review of the relevant case authorities, concludes that fraud or a sham, strictly speaking, need not be shown to justify the piercing of a corporate veil under Delaware law.
See Mobil Oil, F. However, the requisite injustice or unfairness referred to in Fletcher is also not simple in nature but rather something that is similar in nature to fraud or a sham.
Therefore, the Court views as largely superficial the difference in the parties' positions as to what must be shown in order to pierce a corporate veil under Delaware law — "fraud or something like it is required," Mobil Oil, F.
Furthermore, the fraud or similar injustice that must be demonstrated in order to pierce a corporate veil under Delaware law must, in particular, "be found in the defendants' use of the corporate form. Sears plc, F. Therefore, "[t]he underlying cause of action[, at least by itself,] does not supply the necessary fraud or injustice.
To hold otherwise would render the fraud or injustice element meaningless, and would sanction bootstrapping. Additionally, a court shall only pierce a corporate veil "in order to prevent fraud, illegality, or injustice," or the adverse effects thereof. Del Campo Baking Mfg.
First Options of Chicago, Inc. Therefore, that fraud or similar injustice  relative to the use of a corporate form can be shown is immaterial, and thus will not constitute that which is required to pierce a corporate veil, if such fraud or injustice has already been remedied.
Finally, the parties disagree as to the appropriate standard of proof by which one must prove a case for a piercing of the corporate veil under Delaware law, with the Trustee understandably lobbying for a preponderance of the evidence standard and, as the Court would expect, the Defendants maintaining that a clear and convincing evidence standard is the rule.
As an initial matter, the Court agrees with the Trustee that a the sole case upon which the Defendants base their position for a clear and convincing evidence standard, the Third Circuit's decision in Kaplan, is not binding upon the Court in the instant matter given that Kaplan dealt with Pennsylvania law rather than Delaware law, b there does not appear to be any relevant caselaw that applies Delaware law wherein the clear and convincing evidence standard is utilized, and c the Hillsborough decision, even though it was rendered by other than a Delaware court, arguably construes Delaware law such that a preponderance of the evidence standard is applicable to veil piercing cases, see Hillsborough, B.
However, and unfortunately for the Trustee, a the Hillsborough court, in practically the same breath that it uttered its pronouncement approving of a preponderance of the evidence standard, held that "[t]hose who seek to pierce the corporate veil.
Therefore, the Court holds that the appropriate standard of proof by which one must prove a case for a piercing of the corporate veil under Delaware law is, if not a clear and convincing evidence standard, at least somewhat greater than merely a preponderance of the evidence standard.
Having so held on the issue of standard of proof, the Court also concludes, for the reasons set forth below, that the Trustee does not even satisfy the minimal preponderance of the evidence standard when attempting to prove his case for a piercing of the corporate veil of Fox Drug.
For the requisite fraud or similar injustice necessary to pierce the corporate veil of Fox Drug, the Court discerns two theories upon which the Trustee appears to rely in order to satisfy such requirement, namely that a the trade creditors of Fox Drug were misled by officers of Fox Corp.FoxMeyer Health Corp.
clarified that the Chapter 11 bankruptcy filing applies not to itself as the holding company, but only to its drug distribution unit. FoxMeyer Drug accounted for the lion's share of its parent company's $ billion in annual sales.
Nov 21, · Get YouTube without the ads. No thanks 1 month free. Find out why Close. FoxMeyer Drugs echo5h.
Loading Unsubscribe from echo5h? The Truth About Bankruptcy - Duration: FoxMeyer Drug is a wholly-owned subsidiary of the FoxMeyer Corporation, a holding company with no employees, but which shares the same board of directors and same executive officers with FoxMeyer Drug.
FoxMeyer Drug and FoxMeyer Corporation filed for bankruptcy in Delaware. Consequently, the district court stayed further proceedings against. Feb 05, · These are the sources and citations used to research CRITICAL SUCCESS FACTORS.
This bibliography was generated on Cite This For Me on Wednesday, February 4, Website. Davenport, T. CIO Magazine Issue Archive The FoxMeyer Drugs’ Bankruptcy: was it a failure of ERP? - 5th Americas Conference on Information System - Miluwakee. In. McKesson, the leading drug distributor with $14 billion in annual revenues, bought FoxMeyer Drug -- No.
4 in the industry -- out of bankruptcy last November with a net investment of $ million. FoxMeyer Drug, a holding company in the health care services industry, with employees in 23 union and non-union locations throughout the US and Canada. In December , FoxMeyer Drug was a $5 billion-a-year company, one of the leaders among distributors of pharmaceuticals.