The First Circuit Court of Appeals issued an opinion on October 29, 2019, in In re TelexFree, LLC, No. 18-2001, 2019 WL 5558088, at *1 (1st Cir. Oct. 29, 2019) that has significant consequences for ponzi scheme litigation in bankruptcy court.

The TelexFree Ponzi Scheme and Related Bankruptcy Litigation

In In re Woodbridge Grp. of Companies, LLC, No. BR 17-12560-BLS, 2019 WL 4305444 (D. Del. Sept. 11, 2019), the United States District Court for the District of Delaware affirmed an opinion by Bankruptcy Judge Kevin Carey, and held that a proof of claim will be expunged if the note and loan agreement underlying the claim prohibit assignment and provide that assignment without consent will be “null and void.”

Facts

The Bankruptcy Protector

A Texas bankruptcy judge has determined that a landlord will not be entitled to an administrative claim for post-petition rent as it failed to file and prosecute a timely motion for allowance of the administrative rent claim holding that a previously and timely filed proof of claim is insufficient. In re: Taco Bueno Restaurants Inc., --- B.R --- (Docket No. 18-33678), 2019 WL 4010681 (Bankr. N.D. Tex. Aug. 23, 2019).

The Filing and Lease Rejection

The Bankruptcy Protector recently discussed notable non-bankruptcy provisions that must be consulted to ensure compliance with privacy issues. In this post, we discuss notable Bankruptcy Code provisions and Bankruptcy Rules on these issues.

Section 101(41) of the Bankruptcy Code—Personally Identifiable Information

Privacy issues implicate several Bankruptcy Code sections and Bankruptcy Rules. The debtor must also comply with non-bankruptcy rules concerning privacy to the extent that such rules are not inconsistent with the Bankruptcy Code. 28 U.S.C. § 959(b).

There is currently a split in authority on the issue of whether a trustee may recover from an immediate or mediate transferee if the recipient received proceeds from a fraudulent transfer but not the fraudulently transferred property itself.

In this week's update: directors did not need to consider the rights of creditors when declaring a dividend as the company was not insolvent, the Law Commission is seeking views on the law of intermediated securities, polling information can be inside information and a couple of other items.

Court considers whether demerger by dividend was valid (part 4)

This article first appeared in Law360.

In this week's update: a distribution was valid despite discrepancies in the accounts justifying the dividend and an examination of vexatious resolutions.

Court considers whether demerger by dividend was valid (part 2)

In this week's update: directors implementing a management buy-out did not owe fiduciary duties to the other shareholders and a distribution was valid despite the relevant accounts not being in the usual format.

Directors did not owe fiduciary duty to shareholders

The High Court has held that the directors of a company did not owe a fiduciary duty to the company’s shareholders when implementing a management buy-out (MBO).

What happened?