The Court of Appeals for the Seventh Circuit recently issued a decision which may give a trump card to fraudulent transfer defendants seeking to use the “good faith” defense under the Bankruptcy Code’s recovery provision. This defense, set forth in section 550(b)(1), provides that a trustee may not recover a voidable transfer from “a transferee that takes for value, including satisfaction or securing of a present or antecedent debt, in good faith, and without knowledge of the voidablity of the transfer avoided[.]” (emphasis added).
Almost every year, changes are made to the set of rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The changes address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. Often there are revisions to the official bankruptcy forms as well.
What is a proprietary claim? A proprietary claim is a claim to own a specific asset or sum of money.
The trustees of the Olympic Airlines SA Pension and Life Assurance Scheme -v- Olympic Airlines SA
On 29 April 2015, the Supreme Court handed down its judgment in relation to the trustees’ appeal. The unanimous decision was in favour of Olympic Airlines SA (the respondent). The Supreme Court agreed with the Court of Appeal that the High Court was wrong and confirmed that in order for there to be an ‘establishment’ there must be some business dealings with third parties. The trustees’ appeal was therefore dismissed.
Introduction
Companies are habitually used as part of a corruption scheme. Such companies often have only a single director, or a small number of directors, and are beneficially owned by the wrong-doers.
Insolvency powers can be effective tools to obtain compensation for victims of fraud or corruption, in the right circumstances.
A state could, for example, apply to Court for a liquidator to be appointed over a company used for corruption.
When an insolvent entity files for bankruptcy, it can be tough to be a creditor. But holding equity — stock in a corporation or a membership interest in an LLC, a limited liability company — can be even worse. Under bankruptcy’s “absolute priority rule,” creditors generally must be paid in full before equity gets anything. That usually means that holders of equity, or claims treated as equity, get nothing.
A recent decision by the Bankruptcy Court for the Southern District of New York may enhance the ability of bankruptcy trustees and creditors committees to challenge allegedly fraudulent transfers that could qualify for protection under the “safe harbor” of section 546(e) of the Bankruptcy Code.
spring 2015 contentious business update hilldickinson.com Law in Action Page 6 Consumer Rights Bill - all change? Page 8 Mediation – when is it reasonable to refuse? Page 12 Serious Fraud Office (SFO) -vWest, Stone and Sustainable Agro Energy plc (SAE) Gary West, the chief commercial officer of SAE and Stuart Stone, director of SJ Stone Ltd, were convicted of offences under the Bribery Act 2010 in the context of an overall prosecution for fraud against officers of SAE.
Risky Business. When a debtor is a licensee under a trademark license agreement, does it risk losing those license rights when it files bankruptcy? The question had not been answered in a Delaware bankruptcy case until Judge Kevin Gross recently addressed it in the In re Trump Entertainment Resorts, Inc. Chapter 11 case. A lot was riding on the decision, not just for the parties involved but, given how many Chapter 11 cases are filed in Delaware, more generally for other trademark licensees and owners as well.