Claims trading has become increasingly commonplace in today’s bankruptcy cases, typically with little need for policing by the courts.
USA, Insolvency & Restructuring, Litigation, Greenberg Traurig LLP, Bankruptcy, Private equity, Due diligence, United States bankruptcy court, Fifth Circuit, US District Court for District of Delaware
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.