InGrayson Consulting, Inc. v. Wachovia Securities, LLC (In re Derivium Capital LLC), 716 F.3d 355 (4th Cir. 2013), the U.S. Court of Appeals for the Fourth Circuit examined whether certain securities transferred and payments made during the course of a Ponzi scheme could be avoided as fraudulent transfers under sections 544 and 548 of the Bankruptcy Code. The court upheld a judgment denying avoidance of pre-bankruptcy transfers of securities because the debtor did not have an “interest” in the securities at the time of the transfers.

On January 10, 2012, a Florida bankruptcy court ruled in In re Pearlman, 462 B.R. 849 (Bankr. M.D. Fla. 2012), that substantive consolidation is purely a bankruptcy remedy and that it accordingly did not have the power to consolidate the estate of a debtor in bankruptcy with the assets and affairs of a nondebtor. In so ruling, the court staked out a position on a contentious issue that has created a widening rift among bankruptcy and appellate courts regarding the scope of a bankruptcy court’s jurisdiction over nondebtor entities.

Greece is proceeding with the largest sovereign debt restructuring in history after its bondholders accepted a significant debt reduction in the face of mounting evidence that a Greek default was inevitable without such relief. In a related market development garnering only slightly less attention than the debt restructuring itself, the International Swaps and Derivatives Association, Inc.

The rapid evolution of a robust secondary market for claims against the three largest failed Icelandic banks provides a powerful example of the prompt adaptation of an existing secondary-market legal framework -- originally developed in the US and Europe -- to a complex and novel bankruptcy regime and trading environment.