The District Court for the Southern District of New York recently issued an opinion in Picard v. Katz, et al., (In re Bernard L. Madoff Investment Securities LLC),1 which limits avoidance actions against a debtor-broker’s customers to those arising under federal law based on actual, rather than constructive, fraud. The decision was issued by US District Judge Rakoff in the Trustee’s suit against the owners of the New York Mets (along with certain of their friends, family and associates).

Introduction

The Federal Deposit Insurance Corporation (FDIC) has announced that the agenda for its board meeting next Tuesday, January 18, 2011, will include discussion regarding a “Final Rule Implementing Certain Orderly Liquidation Authority Provisions of the Dodd-Frank Act.”

To promote equal treatment of creditors, the US Congress has armed debtors with the power to bring suit to recover a variety of pre-bankruptcy transfers. Prominent among these is a debtor’s ability under Section 548 of the Bankruptcy Code to recover constructively fraudulent transfers — i.e., transfers made without fair consideration when a debtor is insolvent.

To promote equal treatment of creditors, the US Congress has armed debtors with the power to bring suit to recover a variety of pre-bankruptcy transfers. Prominent among these is a debtor’s ability under Section 548 of the Bankruptcy Code to recover constructively fraudulent transfers — i.e., transfers made without fair consideration when a debtor is insolvent.

In 2014, we reported on the Ontario Superior Court of Justice’s decision in Indcondo Building Corporation v. Sloan (“Indcondo“), which strengthened the position of plaintiffs seeking to set aside fraudulent conveyances in Ontario. In the Indcondo case, Mr.

Both of Canada’s primary insolvency statutes, the Bankruptcy and Insolvency Act (“BIA”) and the Companies’ Creditors Arrangement Act (“CCAA”) provide for an automatic stay of all legal proceedings when an insolvent debtor files for or seeks insolvency protection. The purpose of the stay is to provide breathing space to a debtor attempting to restructure its business so as to avoid “death by a thousand cuts” and also to ensure similarly situated creditors are treated equally.

History

On 1 May 2014, the Creditor commenced proceedings against the Debtor for a sequestration order against his estate in respect of unpaid legal costs awarded by the Magistrates Court of Western Australia.

Various preliminary issues protracted the case, including:

In a recent opinion (Masri v Consolidated Contractors International Co. SAL and others [2009] UKHL 43) handed down in the final days of the House of Lords, their Lordships clarified a point which may be of some significance for successful claimants seeking to enforce a Court order against corporate defendants.  

The SFO has announced that managing director and shareholder of Alta Gas Plc, Peter Brian Bradley, has been ordered to pay £1 million compensation to victims following confiscation proceedings on 26 January 2010. In 2001, Alta Gas Plc went into administrative receivership which resulted in the receivers of the company discovering a sophisticated system of false accounts that enhanced the profitability of the company.