Last month, the Chapter 7 trustee (the "Trustee") in the Viashow bankruptcy filed avoidance actions against several creditors of the bankruptcy estate. One avoidance action in particular seeks to recover damages allegedly sustained by Viashow due to breaches of fiduciary duties by its officers and directors (the "D&O Action"). In addition to Viashow's officers and directors, the D&O Action seeks damages against defendants who allegedly "aided and abetted" the officers and directors in their breach.
On June 1, 2009, Viashow filed petitions for bankruptcy in the Delaware Bankruptcy Court under Chapter 7 of the United States Bankruptcy Code. Like most Chapter 7 proceedings, after Viashow filed its petitions, the Office of the United States Trustee appointed a trustee to administer the liquidation of the bankruptcy estate. George L. Miller is the Trustee appointed to oversee the Viashow bankruptcy.
As part of the D&O Action, the Trustee alleges that Viashow made "substantial expenditures on obligations" of non-debtor third parties. A copy of the Complaint filed by the Trustee in the D&O Action (the "Complaint") is available here for review. In the Complaint, the Trustee alleges Viashow covered the expenses associated with the "Fuego Raw Talent" show that ran from August 2008 to February 2009 at the Sahara Hotel and Casino in Las Vegas. According to the Trustee, Viashow covered Fuego's production and advertising costs, as well as costs associated with permits, licensing and sound. All total, the Trustee alleges that over $4.2 million was transferred from Viashow to the various defendants in support of the Fuego show. See Trustee's Complaint at *7-8.
In addition to the D&O Action, the Viashow Trustee has also filed preference actions alleging creditors received avoidable preferences during the 90 days preceding Viashow's bankruptcy petition date. The Viashow bankruptcy is before the Honorable Brendan L. Shannon of the United States Bankruptcy Court for the District of Delaware. The Trustee in Viashow is represented by the law firm Flaster/Greenberg P.C.