In re Biolitec, Inc.
United States Bankruptcy Court for the District of New Jersey
2013 WL 1352302 (2013)
Biolitec (defendant), the U.S. affiliate of a multinational group controlled by Wolfgang Neuberger, lost a $23 million judgment to AngioDynamics (plaintiff) in New York for breach of a supply contract, then showed a drastic loss of assets and rise in debt while appealing that judgment and filing for Chapter 11. AngioDynamics separately sued in Massachusetts, alleging Biolitec fraudulently funneled $18 million to related entities to become judgment-proof; a Massachusetts injunction blocking further transfers and a merger with Biolitec Austria was affirmed by the First Circuit, but Biolitec completed the merger anyway before that decision issued. AngioDynamics then moved in bankruptcy court to replace the debtor-in-possession with a trustee, citing systematic looting.
Whether a trustee may be appointed in place of a debtor-in-possession in Chapter 11 bankruptcy if the appointment is in the best interests of creditors and the estate.