Construction disputes often boil down to a single issue: “show me the money.” Experienced contractors, owners and financiers understand the risks that come with unfinished projects and unpaid work; best practices have long included tracking first visible work, last day of work, and other issues critical to perfecting and enforcing mechanic’s lien rights. But a bankruptcy or a potential bankruptcy of a project participant introduces a new set of challenges and risks to construction projects.
Given the overarching Madoff Ponzi scheme as well as other mini-Madoff schemes that surfaced in its wake, many have been following issues arising from the ability of a trustee to claw back transfers (either as preferential or as fraudulent transfers) from investors who redeemed their interests in a private investment fund or managed account that turned out to be a Ponzi scheme. The law generally provides that an investor’s principal investment is protected so long as it is received in good faith and for value.
Suppose a retailer declares bankruptcy. Several of its leases are sold off to another retail chain, which then remodels the stores, stocks them with its own merchandise, and opens them under its own name. If this retailer hires some of the bankrupt company's employees, are those employees new hires under the FMLA, or might they have the right to take FMLA leave immediately, without waiting 12 months or working 1250 hours for the new company?
The Indiana Court of Appeals ruled on an issue of first impression inGreen Tree Servicing, LLC v. Brough, 930 N.E.2d 1238 (Ind. Ct. App. 2010) that arbitration provisions in consumer loan agreements survive discharge in the borrower’s bankruptcy proceeding.
A company facing a rash of tort lawsuits may try to use a dormant subsidiary’s bankruptcy as a tool to limit its exposure. That’s what Pfizer tried to do, and a New York bankruptcy judge sent them packing. This case is a warning to corporate parents that courts will not allow them to manipulate the process to use the bankruptcies of subsidiaries to further their own agendas. If you’re a creditor you can use this case as ammunition in reorganization disputes to show bad faith. Read on for a quick summary of what happened in the Pfizer case, and what you can learn from it.
Introduction
Recently, there have been cases in several states presenting the issue whether funds in an “inherited IRA” are exempt assets.1 An Ohio Bankruptcy Court has now ruled in favor of granting exempt status.
Introduction
On September 30th, the Sixth Circuit affirmed the dismissal of the bankruptcy trustee's lawsuit against Deloitte & Touche, the debtor's former auditor. The trustee alleged that Deloitte negligently failed to uncover and report unsound related-party transactions by the debtor's sole shareholder and CEO, and aided and abetted the CEO's breach of his fiduciary duty to the debtor. Affirming dismissal, the Court held the trustee failed to allege reliance upon Deloitte's audits and the statute of limitations bars the aiding and abetting claim.
On Friday, the Florida Office of Financial Regulation closed Wakulla Bank, headquartered in Crawfordville, Florida, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Centennial Bank, headquartered in Conway, Arkansas, to assume all of the deposits of the failed bank.