Fraudulent trading is both a civil and criminal offence. The recent judgment of the High Court in Bouchier v Booth provided a helpful reminder of the principles that a Court will apply when considering whether directors have acted in a manner that constitutes fraudulent trading and the high threshold for proving fraudulent conduct.

Judge Jacqueline P. Cox recently found that three Illinois attorneys violated their ethical obligations by failing to return their client’s phone calls. She thus ordered the attorneys to return half of their already-court-approved, and paid, flat fee.

In In re: Dennis Molnar, 19-bk-09525, 2024 WL 190919 (Jan. 17, 2024 N.D, Ill.), the debtor filed a petition seeking relief under chapter 13. Originally, three attorneys from the same firm represented the debtor. The attorneys appeared pursuant to a “no look,” flat-fee program for chapter 13 debtors’ attorneys.

In 2023, the economies of some nations stagnated, but developing economies particularly struggled. As a new year commences, some of these countries will continue their efforts at restructuring their debts—a process that has been going on for years.

The Court of Appeal has ruled that the previous decision of the High Court to sanction a restructuring plan ("Plan") that had been proposed by the Adler Group ("Adler") should be set aside. The decision marks the first appeal in relation to a restructuring plan under Part 26A of the Companies Act 2006 ("Companies Act") and the decision offers clarity on the approach to restructuring plans, particularly when considering issues of "fairness".

We have previously blogged about the section 546(e) defense to a trustee’s avoidance powers under the Bankruptcy Code. A trustee has broad powers to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C. §§ 544, 547, 548. Section 546(e), however, bars avoiding certain transfers, including a “settlement payment . . . made by or to (or for the benefit of) . . . a financial institution [or] a transfer made by or to (or for the benefit of) a . . . financial institution . . . in connection with a securities contract.” 11 U.S.C. § 546(e).

This article originally appeared on Law360.

The uptick in bankruptcy cases will mean more work for insolvency professionals who specialize in asset tracing. Some of the most interesting work will arise in cases where companies engaged in significant fraud.

Each bankruptcy cycle has these cases. In 2001, Enron Corp. filed for bankruptcy. In 2008, there was Bernie Madoff. The latest example is FTX Trading Ltd.

The Supreme Court has provided welcome clarity for insolvency practitioners in confirming that administrators of a company appointed pursuant to the Insolvency Act 1986 ("IA 1986") will not be criminally liable for a failure by the company to comply with redundancy notification requirements.

After years of litigation involving state, federal, Irish, and (to a lesser extent) Swiss law; transfers of numerous assets, including Ireland’s priciest-personal residence; a jury trial; and extensive post-trial briefing, the Second Circuit made short shrift of a former real estate mogul and his ex-wife’s appeal of a judgment rendered against them for fraudulent conveyances.

Federal law assigns to U.S. district courts original jurisdiction over all cases under Title 11 (the Bankruptcy Code) and all civil proceedings arising under Title 11 or arising in or relating to Title 11. See 28 U.S.C. § 1334(a), (b). Federal law permits each U.S. district court to refer such cases and civil proceedings to bankruptcy courts, and district courts generally do so. But bankruptcy courts, unlike district courts, are not courts under Article III of the Constitution, and are therefore constrained in what powers they may constitutionally exercise.

The United States Trustee Program is responsible for the efficient administration of bankruptcy cases throughout most of the country. Since 1986, the Trustee Program has covered all states except North Carolina and Alabama, where an Administrator Program oversees bankruptcy filings instead. Although there are many similarities between the two programs, there is a significant difference in the funding structure. The Trustee Program is entirely self-funded through quarterly fees paid by debtors that file in the Trustee Program districts.