In what appears to be a matter of first impression, Bankruptcy Judge Robert D. Drain, United States Bankruptcy Court for the Southern District of New York, has held that a statutory safe harbor against constructive fraudulent conveyance actions under the Bankruptcy Code involving securities transfers does not apply to the private sale of securities, even when there are no allegations of illegal conduct or fraud involved in the underlying transaction.
USA, New York, Corporate Finance/M&A, Insolvency & Restructuring, Litigation, Squire Patton Boggs, Debtor, Security (finance), Fraud, Safe harbor (law), Commodity broker, Secured loan, Pro rata, Small Business Administration (USA), Title 11 of the US Code, Trustee, United States bankruptcy court, Third Circuit, US District Court for the Southern District of New York