A recent decision out of a New Jersey Bankruptcy Court highlights a loophole in the Bankruptcy Code which may allow Chapter 7 debtors to keep significant assets out of the hands of trustees and creditors.
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The Supreme Court’s Decision:
USA, Insolvency & Restructuring, Litigation, White Collar Crime, Bryan Cave Leighton Paisner (Bryan Cave), Bankruptcy, Debtor, Fraud, Misrepresentation, Common law, Fifth Circuit
In a decision that surprised many, the United Stated Circuit Court of Appeals for the Tenth Circuit (the “10th Circuit Court of Appeals”) affirmed decisions finding that a payment made on account of a first time transaction between a debtor and creditor can qualify for the ordinary course of business defense under 11 U.S.C. § 547(c)(2).
USA, Banking, Insolvency & Restructuring, Litigation, Bryan Cave Leighton Paisner (Bryan Cave), US Code