The illegality defence (which aims to prevent a party benefiting from its illegal conduct via legal claims) has been the subject of considerable judicial analysis in commonwealth jurisdictions in recent years.
Cayman Islands, Global, Insolvency & Restructuring, Litigation, Ogier, House of Lords, UK Supreme Court
In a recent decision by the influential Third Circuit Court of Appeals, In re KB Toys Inc., 2013 U.S. App. LEXIS 23083 at *17 (3d Cir. Nov. 15, 2013), the Court decided that “the cloud on the claim” stemming from a preferential payment made to the original claimant continues with the claim, which then could be disallowed.