On September 10, 2024, the U.S. Court of Appeals for the Third Circuit issued its opinion in Wells Fargo Bank, N.A. v. The Hertz Corp. (In re The Hertz Corp.), Case No. 23-1169, 2024 WL 4132132 (3d Cir. Sept.
On September 12, 2024, the United States Court of Appeals for the Eighth Circuit reversed a trial court decision that had rejected a bank’s assertion of the in pari delicto defense to aiding and abetting claims brought by the bankruptcy trustee for a debtor that had allegedly perpetrated a Ponzi scheme. Kelley v. BMO Harris Bank Nat’l Ass’n, 2024 WL 4158179 (8th Cir. Sept. 12, 2024).
The general rule is that claims of the bankruptcy estate against third parties (e.g., preference claims and tort claims) can be sold to third parties in a § 363 sale.[Fn. 1]
However, a recent opinion from the U.S. Fifth Circuit Court of Appeals discusses whether a state’s champerty law impairs a § 363 sale.[Fn. 2]