Two US federal appeals courts recently held that a provision of the Bankruptcy Code can protect private company sellers in the event that the company they sold later goes bankrupt and a fraudulent transfer claim is brought against them to recover the sale proceeds. The courts found that this protection applies when a financial institution is used to handle the transfer of consideration in the sale.
USA, Insolvency & Restructuring, Litigation, Choate Hall & Stewart LLP, Share (finance), Bankruptcy, Shareholder, Collateral (finance), Security (finance), Privately held company, Consideration, Leveraged buyout, HSBC, Title 11 of the US Code, Eighth Circuit, Sixth Circuit