Two recent cases out of the Third Circuit and the Southern District of New York highlight some of the developing formulas US courts are using when engaging with foreign debtors. In a case out of the Third Circuit, Vertivv. Wayne Burt, the court expanded on factors to be considered when deciding whether international comity requires the dismissal of US civil claims that impact foreign insolvency proceedings.
Key Takeaways
Key Takeaways
You ship goods to a customer that is having financial difficulties. The customer sends you a check for the goods. What do you do?
Cash it and potentially be sued for a preference after the customer files for bankruptcy
or
Don’t cash it, and have a claim in the ensuing bankruptcy
When a majority of a company’s board approves a tender offer in good faith, can it still be avoided as an actually fraudulent transfer? Yes, says the Delaware Bankruptcy Court, holding that the fraudulent intent of a corporation’s CEO who was a board member and exercised control over the board can be imputed to the corporation, even if he was the sole actor with fraudulent intent.
Background
Key Takeaways
Introduction
Preventive measures
Out-of-court reorganisation
In-court reorganisation
Modernisation of bankruptcy
Recently, in In re Moon Group Inc., a bankruptcy court said no, but the district court, which has agreed to review the decision on an interlocutory appeal, seems far less sure.
On 15 November 2023, the Temporary Transparency of Expedited Liquidation Act enters into force, initially for a period of two years. Expedited liquidation (also known as 'turboliquidation') concerns the dissolution of a legal entity with no assets, at its own initiative. The temporary Act aims to increase transparency in the case of an expedited liquidation and to improve the protection of creditors.