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Delaware Bankruptcy Court Rules that Due Diligence Is Element of Preference Claim Rather Than Basis for Affirmative Defense

A bankruptcy trustee's ability to avoid and recover pre-bankruptcy preferential transfers is essential to preserving or augmenting the estate for the benefit of all stakeholders. In 2019, however, the Bankruptcy Code was...more

Claims Traders Alert: Another Bankruptcy Court Rules that a Traded Claim Can Be Disallowed if the Seller Received a Voidable...

The U.S. Bankruptcy Court for the Southern District of New York recently added some weight to the majority rule on a hot-button issue for claims traders. In In re Firestar Diamond, Inc., 615 B.R. 161 (Bankr. S.D.N.Y. 2020),...more

Bolstering the Majority Rule: Bankruptcy Court Holds that Adjudication of Avoidance Liability Is Prerequisite to Disallowance of...

The U.S. Bankruptcy Court for the Eastern District of North Carolina recently added some weight to the majority rule on an issue that has long divided bankruptcy and appellate courts. In In re Southern Produce Distributors,...more

Tribune District Court Rules That LBO Payments May Not Be Avoided Because Debtor Was "Customer" of "Financial Institution"

In In re Tribune Co. Fraudulent Conveyance Litig., 2019 WL 1771786 (S.D.N.Y. Apr. 23, 2019), the U.S. District Court for the Southern District of New York denied a litigation trustee’s motion to amend a complaint seeking to...more

Second Circuit Rules that Bankruptcy Code’s Fraudulent Transfer Recovery Provisions Can Reach Foreign Transferees

The ability of a bankruptcy trustee to avoid fraudulent or preferential transfers is a fundamental part of U.S. bankruptcy law. However, when an otherwise avoidable transfer by a U.S. entity takes place outside the U.S. to a...more

Proposed Amendments to Chapter 15 of the Bankruptcy Code

On August 20, 2018, the National Bankruptcy Conference (the "NBC") submitted a letter (the "Letter") to representatives of the House Subcommittee on Regulatory Reform and the House Committee on the Judiciary that proposed...more

From the Top in Brief

On April 3, 2018, the U.S. Supreme Court issued an order that, in light of its recent ruling in Merit Management Group LP v. FTI Consulting Inc., 138 S. Ct. 883, No. 16-784 (Feb. 27, 2018), the Court would defer consideration...more

Third Circuit Rules That Transfer by Nondebtor Is Not Avoidable as Fraudulent Transfer Under Delaware UFTA

In Crystallex International Corp. v. Petróleos de Venezuela, S.A., 879 F.3d 79 (3d Cir. 2018), a divided U.S. Court of Appeals for the Third Circuit ruled that transfers by nondebtor subsidiary corporations to their ultimate...more

Foreign Debtors’ Forum Shopping Warranted Stay of U.S. Avoidance Litigation

Even if a U.S. court has jurisdiction over a lawsuit involving foreign litigants, the court may conclude that a foreign court is better suited to adjudicate the dispute because either: (i) it would be more convenient, fair,...more

Debate Intensifies as to Whether the Bankruptcy Code’s Avoidance Provisions Apply Extraterritorially

The ability of a trustee or chapter 11 debtor-in-possession to avoid fraudulent or preferential transfers is a fundamental part of U.S. bankruptcy law. However, when a transfer by a U.S. entity takes place outside the U.S. to...more

U.S. Supreme Court Narrows Scope of Section 546(e)’s Safe Harbor for Securities Transaction Payments

On February 27, 2018, the U.S. Supreme Court issued a highly anticipated ruling resolving a long-standing circuit split over the scope of the Bankruptcy Code’s "safe harbor" provision exempting certain securities transaction...more

Yet Another Ruling Deepens the Divide on Whether the Bankruptcy Code’s Avoidance Provisions Apply Extraterritorially

The ability to avoid fraudulent or preferential transfers is a fundamental part of U.S. bankruptcy law. However, when a transfer by a U.S. entity takes place outside the U.S. to a non-U.S. transferee—as is increasingly common...more

Foreign Representative Had "Independent" Standing to Prosecute State Law Avoidance Claims in Chapter 15

If a foreign debtor is eligible to file for bankruptcy protection in the U.S., the debtor's foreign representative (e.g., a liquidator or administrator) may, under certain circumstances, have the power to avoid and recover...more

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