The global COVID-19 pandemic has created uncertainty around the planned deal-making activities of many middle market private equity funds. However, this environment also creates significant opportunity to provide investment and financing to companies that find themselves in distressed circumstances.

Background

In family law property settlement proceedings, if a spouse is declared bankrupt, the trustee in bankruptcy may join the proceedings in an effort to recover funds from the property pool to pay the bankrupt’s creditors.

While in theory this approach sounds sensible, it may not always be prudent for a trustee in bankruptcy to seek to be joined or consent to being joined. In particular, recent trends suggest that trustees are being very cautious about getting involved in proceedings between a bankrupt and their spouse.

The involvement of a trustee in bankruptcy