One of the significant risks that creditors weigh when deciding whether to lend money is bankruptcy risk: can the borrower use the bankruptcy laws to discharge the debt or compel the creditor to accept less than it bargained for? In the sovereign debt market, it has been an article of faith for creditors that states cannot file for bankruptcy and obtain such relief. But a recent ruling from the U.S. District Court for the Southern District of New York—Hamilton Reserve Bank v.
What does it mean to own something? When should the law acknowledge that somebody really owns something, even if they don't formally own it?
And when will courts recognize the economic reality that one person — say, a judgment debtor — in truth owns something, notwithstanding that person's painstaking efforts to keep formal legal title in the hands of others?
The law has long recognized doctrines to disregard the existence, or pierc the veil, of corporate entities to which a debtor has transferred assets.
As 21st century disputes take on an increasingly cross-border character, so, too have parties resorted to a powerful tool provided to non-U.S. litigants under American law -- petitions to take discovery pursuant to Title 28 of the U.S. Code, Section 1782.
While many have focused on the question of whether private international arbitrations can support Section 1782 petitions, case law has evolved on another question: Can Section 1782 be used by litigants seeking to identify property to satisfy judgments rendered in non-U.S. proceedings?
On July 6-7, 2017, Craig Jalbert, in his capacity as Trustee for F2 Liquidating Trust, filed approximately 187 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code (depending on the nature of the claims). In certain instances, the Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
On June 15, 2017, Curtis R. Smith, as Liquidating Trustee of the Hastings Creditors’ Liquidating Trust, filed approximately 69 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. The Liquidating Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
On June 13, 2017, The Original Soupman, Inc. and its affiliates (collectively “Debtors” or “Original Soupman”) commenced voluntary bankruptcy proceedings under Chapter 11 of the Bankruptcy Code. According to its petition, Original Soupman estimates that its assets are between $1 million and $10 million, and its liabilities are between $10 million and $50 million.
On May 17, 2017, GulfMark Offshore, Inc. (“GulfMark” or “Debtor”) filed a voluntary petition for bankruptcy relief under chapter 11 of the Bankruptcy Code in the United States District Court for the District of Delaware.
Starting on April 28, 2017, Craig R. Jalbert, as Distribution Trustee of the Corinthian Distribution Trust, filed approximately 122 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548, 549 and and 550 of the Bankruptcy Code (depending upon the nature of the underlying transactions). The Distribution Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
Whether a claim against company management is direct or derivative is not infrequently disputed in litigation before the Delaware Court of Chancery. This determination becomes important in many contexts, including whether it was necessary for plaintiff to make a pre-suit demand upon the board, whether derivative claims of a company have been assigned to a receiver, or whether such claims have previously been settled in a prior litigation.
Not uncommonly, a preference complaint fails to adequately allege that the transfers sought to be recovered by the trustee were made “for or on account of an antecedent debt owed by the debtor before such transfer was made”, as required under Section 547(b) of the Bankruptcy Code. Thus, when faced with a complaint to recover alleged preferential transfers, a defendant can proceed in one of two ways: (i) file an answer and raise affirmative defenses, or (ii) move to dismiss under Rule 12(b)(6).