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

by Jones Day
Contact

Jones Day

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 a non-U.S. transferee—as is increasingly common in the global economy—courts disagree as to whether the Bankruptcy Code’s avoidance provisions apply extraterritorially to avoid the transfer and recover the transferred assets. Several bankruptcy courts have addressed this issue in recent years, with inconsistent results.

In a recent example, in In re CIL Limited, 2018 WL 329893 (Bankr. S.D.N.Y. Jan. 5, 2018), the U.S. Bankruptcy Court for the Southern District of New York, disagreeing with other courts both within and outside its own district, ruled that the "transfer of an equity interest in a U.K. entity to a Marshall Islands entity was a foreign transfer" and that the Bankruptcy Code’s avoidance provisions do not apply extraterritorially because "[n]othing in the language of sections 544, 548 and 550 of the Bankruptcy Code suggests that Congress intended those provisions to apply to foreign transfers."

The Presumption Against Extraterritoriality

"It is a longstanding principle of American law ‘that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.’ " EEOC v. Arabian American Oil Co., 499 U.S. 244, 248 (1991) (quoting Foley Bros. v. Filardo, 336 U.S. 281, 285 (1949)). This "presumption against extraterritoriality" is a judicially developed rule of statutory construction whereby federal law is presumed not to apply to conduct or property outside the United States "unless a contrary intent appears." Morrison v. National Australia Bank Ltd., 561 U.S. 247, 255 (2010). In Smith v. United States, 507 U.S. 197, 204 n.5 (1993), the U.S. Supreme Court explained that this presumption is at least partially "the commonsense notion that Congress generally legislates with domestic concerns in mind." The presumption also "serves to protect against unintended clashes between our laws and those of other nations which could result in international discord." Arabian American, 499 U.S. at 248 (citing McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 20–22 (1963)).

Contrary intent is shown through "clear evidence," in either the statutory text or the "legislative purpose underlying it." Id. at 204. However, a law need not explicitly state that "this law applies abroad" to have extraterritorial effect, and context is relevant to infer the statute’s meaning. Morrison, 561 U.S. at 255.

In Morrison and RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090 (2010), the Supreme Court outlined a two-step approach to determining whether the presumption against extraterritoriality forecloses a claim. First, the court examines "whether the presumption against extraterritoriality has been rebutted—that is, whether the statute gives a clear, affirmative indication that it applies extraterritorially." Nabisco, 136 S. Ct. at 2101; accord Morrison, 561 U.S. at 255. If the conclusion is that the presumption has been rebutted, the inquiry ends.

If it has not been rebutted, the court must determine whether the case involves a domestic application of the statute by examining its "focus." If the conduct relevant to that focus occurred in the U.S., "the case involves a permissible domestic application even if other conduct occurred abroad." Nabisco, 136 S. Ct. at 2101; accord Morrison, 561 U.S. at 266–67. However, if the conduct relevant to the focus of the statute did not occur in the U.S., "the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory." Id.; accord Societe Generale plc v. Maxwell Commc’n Corp. plc (In re Maxwell Commc’n Corp. plc), 186 B.R. 807, 816 (S.D.N.Y. 1995) ("Maxwell I"), aff’d on other grounds, 93 F.3d 1036 (2d Cir. 1996) ("Maxwell II").

Most courts have adopted a flexible approach in determining whether a transaction occurred in the U.S. or was extraterritorial for this purpose. Many apply a "center of gravity" test, whereby the court examines the facts of the case to ascertain whether they have a center of gravity outside the U.S. See, e.g., French v. Liebmann (In re French), 440 F.3d 145, 149 (4th Cir. 2006), cert. denied, 549 U.S. 815 (2006); In re Florsheim Group Inc., 336 B.R. 126, 130 (Bankr. N.D. Ill. 2005). This analysis may involve consideration of "all component events of the transfer[]," Maxwell I, 186 B.R. at 816, such as "whether the participants, acts, targets, and effects involved in the transaction at issue are primarily foreign or primarily domestic." French, 440 F.3d at 150.

Extraterritorial Operation of U.S. Bankruptcy Law?

In certain respects, U.S. bankruptcy law has explicitly applied extraterritorially for more than 60 years. In 1952, due to confusion about the scope of a debtor’s property to be administered by a bankruptcy trustee under the Bankruptcy Act of 1898, Congress inserted the phrase "wherever located" into section 70a of the act "to make clear that a trustee in bankruptcy is vested with the title of the bankrupt in property which is located without, as well as within, the United States." H.R. Rep. No. 82-2320, at 15 (1952), reprinted in 1952 U.S.C.C.A.N. 1960, 1976; see also Pub. L. No. 82-456, 66 Stat. 420 (July 7, 1952). This language was preserved in section 541(a) of the Bankruptcy Code (enacted in 1978), which states that the bankruptcy estate includes the debtor’s property "wherever located and by whomever held." Section 541(a) provides further that such property includes various "interests" of the debtor in property. Similarly, 28 U.S.C. § 1334(e) gives federal district courts—and, by jurisdictional grant pursuant to 28 U.S.C. § 157(a), bankruptcy courts within each district—exclusive jurisdiction of all property of the debtor and its estate, "wherever located."

Many courts have concluded that, because the automatic stay imposed by section 362(a) of the Bankruptcy Code expressly prohibits, among other things, acts to obtain possession of "property of the estate," the stay bars creditor collection efforts with respect to estate property located both within and outside the U.S. See, e.g., Milbank v. Philips Lighting Elecs. N. Am. (In re Elcoteq, Inc.), 521 B.R. 189 (Bankr. N.D. Tex. 2014); In re Nakash, 190 B.R. 763 (Bankr. S.D.N.Y. 1996).

However, the provisions of the Bankruptcy Code permitting avoidance and recovery of preferential or fraudulent transfers—i.e., sections 544, 547, 548, and 550—do not expressly refer to "property of the estate" as that term is defined in section 541 or even to section 541 itself. Instead, section 544 permits the trustee to avoid certain transfers of "property of the debtor" or interests of the "debtor in property"; sections 547(b) and 548(a)(1) provide for the avoidance of "an interest of the debtor in property"; and section 550 permits the trustee to recover "the property transferred" or its value from the transferee.

Furthermore, some courts, noting that section 541(a)(3) of the Bankruptcy Code provides that any "interest in property that the trustee recovers under section . . . 550" is part of the estate, have concluded that fraudulently or preferentially transferred property is not estate property unless and until it is recovered by the trustee. See, e.g., FDIC v. Hirsch (In re Colonial Realty Co.), 980 F.2d 125 (2d Cir. 1992) (if property that has been fraudulently transferred is included in "property of the estate" under section 541(a)(1), section 541(a)(3) is rendered meaningless with respect to property recovered pursuant to fraudulent transfer actions); accord Rajala v. Gardner, 709 F.3d 1031 (10th Cir. 2013). But see Am. Nat’l Bank of Austin v. MortgageAmerica Corp. (In re MortgageAmerica Corp.), 714 F.2d 1266, 1277 (5th Cir. 1983) ("[p]roperty fraudulently conveyed and recoverable under the Texas Fraudulent Transfers Act remains, despite the purported transfer, property of the estate within the meaning of section 541(a)(1)").

The different language used in the avoidance provisions, on the one hand, and the statutory jurisdictional grant and the definition of "estate property," on the other, has created confusion in the courts as to whether the avoidance provisions were intended by Congress to apply to property outside the U.S.

Case Law Addressing Extraterritoriality of Avoidance Provisions

Prior to Morrison, the courts in Maxwell I, Maxwell II, French, and Barclay v. Swiss Fin. Corp. Ltd. (In re Bankr. Estate of Midland Euro Exch. Inc.), 347 B.R. 708 (Bankr. C.D. Cal. 2006), adopted differing approaches in determining whether the Bankruptcy Code’s avoidance provisions apply extraterritorially. In Maxwell I, the district court ruled that Congress did not clearly express its intention, in statutory language or elsewhere, for section 547 to empower a trustee to avoid foreign preferential transfers. The U.S. Court of Appeals for the Second Circuit affirmed, but on the separate basis that, under principles of international comity, the U.S. court must defer to the courts and laws of the U.K., and U.S. avoidance and recovery provisions should not apply to the transfers at issue. See Maxwell II, 93 F.3d at 1054–55.

The U.S. Court of Appeals for the Fourth Circuit held to the contrary in French. Agreeing with an argument rejected in Maxwell I, the Fourth Circuit held that it need not decide whether the transfer of a Bahamian residence was extraterritorial because "Congress made manifest its intent that § 548 apply to all property that, absent a prepetition transfer, would have been property of the estate, wherever that property is located." By incorporating the language of section 541 to define what property a trustee may recover, the Fourth Circuit wrote, section 548 "plainly allows a trustee to avoid any transfer of property that would have been ‘property of the estate’ prior to the transfer in question—as defined by § 541—even if that property is not ‘property of the estate’ now."

The Fourth Circuit cited Begier v. IRS, 496 U.S. 53 (1990), in support of its conclusion that Congress intended section 548 to apply extraterritorially. The issue in Begier was not extraterritorial application of U.S. avoidance law, but whether property preferentially transferred was "property of the debtor" at the time of the transfer. As noted previously, section 541(a) defines "property of the estate," and section 547(b) authorizes the trustee to avoid transfers of "an interest of the debtor in property," but the Bankruptcy Code does not define the latter.

According to the Supreme Court in Begier, "property of the debtor," the transfer of which is subject to avoidance under section 547(b), "is best understood as that property that would have been part of the estate had it not been transferred" pre-bankruptcy. Id. at 58–59. The Court looked for guidance to section 541. In delineating the scope of "property of the estate," the Court wrote, section 541 "serves as the postpetition analog to § 547(b)’s ‘property of the debtor.’ " Id. It ruled that because property held by the debtor in trust is neither "property of the estate" under section 541 nor "property of the debtor" for purposes of section 547(b), a chapter 7 trustee could not avoid a transfer of such property held in trust as a preference.

In Midland Euro, the bankruptcy court considered whether section 548 could be used to avoid a transfer of funds by a Barbados corporation to an English company from an English bank through a U.S. bank to another English bank. Stating that in French, the Fourth Circuit "totally ignores § 541(a)(3) and uses an unclear and convoluted method to reach its conclusion," the Midland Euro court ruled that it could "find no basis for holding that Congress intended the trustee’s avoiding powers to apply extraterritorially." 347 B.R. at 719. The court also held that allegedly fraudulent transfers do not become property of the estate until they are avoided.

Since the Supreme Court outlined its two-step approach on extraterritorial application of statutes in Morrison, several courts have undertaken to apply that approach to the Bankruptcy Code’s avoidance and recovery provisions. In Picard v. Bureau of Labor Ins. (In re Bernard L. Madoff Inv. Sec. LLC), 480 B.R. 501 (Bankr. S.D.N.Y. 2012) ("BLI"), the bankruptcy court applied the two-step analysis required by Morrison to determine whether a trustee could recover redemption payments under section 550 that were made to the New York and London accounts of a Taiwanese entity. The court ruled that, because the initial transfers of the debtor’s assets had occurred in New York, the trustee was not seeking extraterritorial application of section 550. The court also concluded in dicta that "Congress demonstrated its clear intent for the extraterritorial application of Section 550 through interweaving terminology and cross-references to relevant Code provisions," including sections 541 and 548 and 28 U.S.C. § 1334(e)(1). Id. at 527. According to the court, "[T]he concepts of ‘property of the estate’ and ‘property of the debtor’ are the same, separated only by time." Id.

The district court in the same district reached the opposite conclusion in S.I.P.C. v. Bernard L. Madoff Inv. Sec. LLC, 513 B.R. 222 (S.D.N.Y. 2014) ("Madoff"). In ruling that section 550 does not apply extraterritorially, the court wrote:

Under the logic of Colonial Realty, whether "property of the estate" includes property "wherever located" is irrelevant to the instant inquiry: fraudulently transferred property becomes property of the estate only after it has been recovered by the Trustee, so section 541 cannot supply any extraterritorial authority that the avoidance and recovery provisions lack on their own.

513 B.R. at 230.

In Weisfelner v. Blavatnik (In re Lyondell), 543 B.R. 127 (Bankr. S.D.N.Y. 2016), the bankruptcy court refused to grant a motion to dismiss a claim seeking avoidance of a fraudulent transfer under section 548 on the ground that the challenged transfer occurred outside the U.S. The court reasoned that Congress could not have intended to exclude extraterritorial transfers from avoidance under section 548 while explicitly defining "property of the bankruptcy estate" under section 541 to include all of the debtor’s property "wherever located and by whomever held."

Persuaded by the Fourth Circuit’s reasoning in French, the court distinguished the case before it from Colonial Realty. In Colonial Realty, the Lyondell court explained, the Second Circuit’s recognition that sections 541(a)(1) and (a)(3) "were speaking as of different times" fell "far short of holding that property not in the estate as of the commencement of the case cannot be brought into the estate because it is in a foreign locale." The Lyondell court held that Congress could not have intended for property anywhere in the world to enter the bankruptcy estate once recovered pursuant to the avoidance powers while simultaneously not intending for such powers to reach anywhere in the world.

In Spizz v. Goldfarb Seligman & Co. (In re Ampal-Am. Israel Corp.), 562 B.R. 601 (Bankr. S.D.N.Y. 2017), the bankruptcy court agreed with Madoff and Maxwell I that the avoidance provisions of the Bankruptcy Code, including section 547(b), do not apply extraterritorially. According to the court, "Property transferred to a third party prior to bankruptcy . . . is neither property of the estate nor property of the debtor at the time the bankruptcy case is commenced, the only two categories of property mentioned in Bankruptcy Code § 541(a)(1)." The court also wrote that "the Begier Court’s conclusion that ‘property of the debtor’ is best understood as property that would have become ‘property of the estate’ but for the transfer does not support the French and BLI courts’ interpretation of section 548." In Begier, the court explained, the Supreme Court read section 541(a) "as a limitation on the trustee’s avoiding powers, not as an expansion of those powers."

The Ampal-American court noted that, although some provisions of the Bankruptcy Code and corresponding jurisdictional statutes, such as section 541(a) and 28 U.S.C. § 1334(e)(1), contain clear statements which they apply extraterritorially, section 547 does not—nor, it added in a footnote, does section 548. Because the transfer at issue occurred outside the U.S., the court ruled that it could not be avoided by the trustee.

In In re FAH Liquidating Corp., 572 B.R. 117 (Bankr. D. Del. 2017), prior to filing for chapter 11 protection, the debtor entered into supply agreements with a German corporation headquartered in Munich. The agreements were expressly governed by German law and included a German forum selection clause. A litigation trustee appointed under the debtor’s liquidating chapter 11 plan sued the German corporation to avoid wire transfers made pursuant to the agreements as constructively fraudulent transfers under sections 544, 548, and 550 of the Bankruptcy Code. The German corporation moved to dismiss the complaint, arguing that the wire transfers were extraterritorial and could not be avoided.

Adopting the reasoning of Lyondell, the FAH Liquidating court found that, although the wire transfers were extraterritorial, the presumption against extraterritoriality did not prevent the trustee’s use of section 548 to avoid the transfers because Congress intended for the provision to apply extraterritorially.

Having concluded that the challenged transfers were extraterritorial, the court ruled that the presumption against extraterritoriality with respect to section 548 was overcome because Congress intended the provision to "reach such foreign transfers." On this point, the FAH Liquidating court agreed with the courts’ reasoning in Lyondell and French.

The court further held that German law, rather than the Uniform Fraudulent Transfer Act, as enacted in either California or Delaware, governed the trustee’s avoidance claims under section 544(b). Because the trustee would not have a remedy to avoid the transfers under section 544(b) if German law applied, the court dismissed the section 544(b) claim.

In Official Comm. of Unsecured Creditors of Arcapita Bank B.S.C.(C) v. Bahrain Islamic Bank (In re Arcapita Bank B.S.C.(C)), 575 B.R. 229 (Bankr. S.D.N.Y. 2017), and Official Comm. of Unsecured Creditors of Arcapita Bank B.S.C.(C) v. Tadhamon Capital B.S.C. (In re Arcapita Bank B.S.C.(C), 2017 BL 368397 (Bankr. S.D.N.Y. Oct. 13, 2017), motion for reconsideration denied, 2018 BL 38409 (Bankr. S.D.N.Y. Feb. 5, 2018), Arcapita Bank B.S.C.(C) ("Arcapita"), a Bahrain-headquartered investment bank, entered into investment agreements with commercial banks (the "defendants") headquartered in Bahrain and Yemen. The agreements were negotiated and signed in Bahrain and provided that Bahraini law would govern any disputes, with certain exceptions. Arcapita funded the investments by transferring $30 million from its U.S. bank account to U.S. bank accounts maintained by the defendants.

After Arcapita filed for chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York, the official creditors’ committee sued the defendants, seeking, among other things, to avoid and recover the $30 million in payments as preferential transfers under sections 547 and 550. The defendants moved to dismiss, contending that the avoidance claims were precluded by the "presumption against extraterritoriality."

The bankruptcy court denied the defendants’ motion to dismiss because the committee’s claims were either based on domestic conduct—the U.S. bank transfers were at the "heart" of the transactions—or based on statutes that apply extraterritorially. Because the court concluded that the transfers were domestic rather than foreign, the court noted that it "need not resolve whether the avoidance provisions [here, sections 547 and 550] of the Bankruptcy Code apply extraterritorially."

CIL

CIL Limited, formerly known as CEVA Logistics Limited ("CEVA Logistics"), was a Cayman Islands holding company that owned 100 percent of the stock of the CEVA Group PLC ("CEVA Group"). CEVA Group is a Netherlands-based company that through its subsidiaries conducts logistics and freight management services in 160 countries. As of March 2013, CEVA Logistics was owned by investment funds controlled by New York-based Apollo Global Management, LLC (collectively, "Apollo").

Beginning on April 1, 2013, CEVA Group, CEVA Logistics, and certain related entities entered into a restructuring agreement pursuant to which, among other things, new CEVA Group stock was issued to a newly formed Marshall Islands affiliate of Apollo—CEVA Holdings LLC ("CEVA Holdings")—and CEVA Logistics’ ownership interest in CEVA Group was reduced to 0.01 percent.

On April 2, 2013, CEVA Logistics changed its name to CIL Limited ("CIL" or the "debtor") and commenced provisional liquidation proceedings in the Cayman Islands. Shortly afterward, Cayman Islands-based creditors filed an involuntary chapter 7 petition against the debtor in the U.S. Bankruptcy Court for the Southern District of New York. The bankruptcy court entered an order for relief in the chapter 7 case on May 14, 2013. On May 31, 2013, the Cayman Islands court converted the provisional liquidation proceedings to official liquidation proceedings.

Contending that CIL received no benefit in connection with the 2013 restructuring agreement, the chapter 7 trustee commenced an adversary proceeding in the U.S. bankruptcy court seeking, among other things, a determination that the stock transfer made as part of the restructuring was actually and constructively fraudulent under U.S. federal law (sections 544(b) and 548 of the Bankruptcy Code), U.S. state law (the New York Debtor & Creditor Law), and foreign law (the U.K. Insolvency Act of 1986 and the Cayman Islands Companies Law). The trustee sought to avoid the transfer and to recover the new CEVA Group stock or its value under sections 550 and 551 of the Bankruptcy Code. The defendants moved to dismiss, arguing that: (i) the stock transfer was foreign, and sections 544, 548, and 550 cannot be applied extraterritorially; and (ii) principles of international comity dictate that the fraudulent transfer claims be dismissed because the interests of the Cayman Islands in adjudicating the dispute outweigh those of the U.S.

The Bankruptcy Court’s Ruling

The bankruptcy court dismissed the fraudulent transfer claims. Initially, the court found that the transfer at issue was foreign because it involved the transfer of an equity interest in a U.K. entity (CEVA Group) from a Cayman Islands entity (the debtor) to a Marshall Islands entity (CEVA Holdings). The court rejected the chapter 7 trustee’s argument that the "center of gravity" of the challenged transaction was in the U.S., noting that the trustee overstated the significance of the contacts of the defendants (which included Apollo, the officers and director of the debtors and their affiliates, and the companies’ professionals and agents) with the U.S.

Next, the court explained that "Congress has not expressed an affirmative intent for sections 548 and 550 to be applied extraterritorially, and nothing in the text of those sections indicates such an intent." Like the courts in Madoff and Ampal-American, the CIL bankruptcy court concluded that Congress’s failure to do so, "particularly in light of the fact that sections 541(a)(1) and 1334(e) expressly apply extraterritorially, operates to limit sections 548 and 550 to their terms."

In addition, the CIL court agreed with Maxwell I and Madoff that, in assessing the scope of the Bankruptcy Code’s avoidance provisions, section 541(a)(1) is irrelevant because property that is the subject of avoidance litigation does not become "property of the estate" unless and until it is recovered. Like the court in Lyondell, the CIL court acknowledged that the application of section 541(a)(3) (designating interests in recovered property as estate property) "might be viewed as to give rise to a ‘timing’ problem." Even so, the CIL court ruled, Congress has not "clearly expressed" that sections 548 and 550 apply extraterritorially.

The court also held that section 544(b), which permits a trustee to bring avoidance actions available to creditors under "applicable law" (here, New York State, U.K., and Cayman Islands law), cannot be used to avoid foreign transfers. The court rejected the chapter 7 trustee’s argument that, by means of section 544(b), he was attempting not "an ‘extraterritorial’ exportation of U.S. law[,]" but to bring foreign law into a U.S. bankruptcy case. The court wrote that it was "not persuaded that the inclusion of the phrase ‘voidable under applicable law’ gives section 544(b) de facto extraterritorial application."

Finally, the court held that, by application of the principles of international comity, Cayman Islands law applied to the avoidance claims. However, the bankruptcy court also ruled that due to, among other things, practical concerns regarding the chapter 7 trustee’s ability to bring avoidance claims in the Cayman Islands (whose law does not recognize constructively fraudulent transfers), the court would adjudicate the trustee’s intentional fraud claim under Cayman Islands law, but "divorced of any aspect of the Bankruptcy Code."

Outlook

CIL further muddies the waters on an issue that has become increasingly prominent as the volume of cross-border bankruptcy cases, and the prominence of cross-border transactions, continues to grow. The split on this issue exists not merely between courts in different jurisdictions, but also among courts in the Southern District of New York, where the majority of cross-border bankruptcy cases have traditionally been filed.

As things stand, the courts in CIL, Ampal-American, Madoff, Midland Euro, and Maxwell I have ruled that the Bankruptcy Code’s avoidance provisions do not apply extraterritorially. The courts in FAH Liquidating, Lyondell, BLI, and French—the last being the only circuit court of appeals decision on this issue—have ruled to the contrary. The bankruptcy court in Arcapita Bank skirted the issue.

Without the ability to avoid extraterritorial transfers by U.S. debtors to non-U.S. entities under U.S. law, the only recourse available to many bankruptcy trustees, chapter 11 debtors-in-possession, or other representatives of U.S. debtors (such as chapter 11 plan trustees or the representative of a U.S. debtor in a case filed in another country that has enacted the UNCITRAL Model Law on Cross-Border Insolvency) would likely be litigation abroad to seek avoidance and recovery of transferred property under foreign law. However, at least two courts, including the bankruptcy court in CIL, have ruled that a U.S. bankruptcy court can adjudicate foreign law avoidance claims. Accord Hosking v. TPG Capital Mgmt., L.P. (In re Hellas Telecomms. (Luxembourg) II SCA), 535 B.R. 543 (Bankr. S.D.N.Y. 2015) (in a chapter 15 case, even though U.K. law governed actual fraudulent transfer claims asserted by the liquidators of a foreign debtor, a U.S. bankruptcy court had jurisdiction to adjudicate the claims applying U.K. law).

Nevertheless, relatively few countries besides the U.S. have enacted avoidance laws. This means that non-U.S. transferees are in many cases effectively insulated from avoidance liability.

Failing congressional action, the Second Circuit could resolve the uncertainty on this issue at least in the Southern District of New York by definitively ruling one way or another. However, even if the Second Circuit were to hold that the Bankruptcy Code’s avoidance provisions apply extraterritorially, practical problems would remain. For example, a U.S. court may lack personal jurisdiction over a non-U.S. transferee, a fact that would significantly complicate efforts to enforce any avoidance ruling. See Lyondell, 543 B.R. at 147 (concluding that a litigation trustee in a chapter 11 case failed to make a prima facie case for the court’s exercise of personal jurisdiction consistent with due process over a foreign transferee in avoidance litigation)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jones Day | Attorney Advertising

Written by:

Jones Day
Contact
more
less

Jones Day on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.