The finality of securities transactions is critical not only to investors but also to global securities markets whose stability depends upon a very basic, but crucial, assumption: once a securities transaction is  complete, it cannot be undone. However, in the wake of the Ponzi scheme perpetrated by Bernard Madoff, this fundamental assumption has been challenged and courts have had to determine whether and under what circumstances a transfer in connection with a securities transaction can be recovered by a bankruptcy trustee.

Interest in cryptocurrencies is growing, even after Mt. Gox, formerly the largest international bitcoin exchange, filed for bankruptcy in Japan following $473 million in losses.

Despite the absence of any provision in the Bankruptcy Code expressly authorizing the recharacterization of a debt claim to an equity interest, it generally is well-established that recharacterization is within the broad powers afforded a bankruptcy court under section 105(a) of the Bankruptcy Code and is necessary for the proper application of the Bankruptcy Code’s priority scheme.1  In a recharacterization analysis, a

bankruptcy court ignores the labels of a transaction, examines the facts, and determines whether a

Four decades ago, when I began my legal career, bankruptcy sales were held in low regard. They were regarded, and often referred to, as “fire sales” that were almost certain to attract no interested parties other than bottom feeding liquidators seeking to pay only a fraction of the value of the marketed assets. For this reason, potential sellers steered clear of bankruptcy.

Since reports last month that a grand bargain had been struck to provide an infusion of cash to the Detroit bankruptcy in exchange for conveying the artwork at the Detroit Institute of Arts back to the museum itself, it has been largely accepted that the deal would succeed.  The deal would contribute $366 million from several foundations, $100 million from the DIA foundation, and $350 million from the State of Michigan.  This air of inevitability is due in large part to the cards that Emergency Manager Kevyn Orr holds: unless Detroit wants to monetize or sell the DIA collection th

Chances are if you are a provider of goods or services and do business pursuant to some form of a short-term or long-term credit arrangement that you have received correspondence from a bankruptcy Trustee or a Chapter 11 debtor demanding money on the basis of an alleged “preference.” Perhaps some of you have even been served with a formal complaint demanding the same. If so, then this article is meant to take some of the mystery out of preferences and to offer some advice as to what to do when you receive such a correspondence.

WHAT IS A PREFERENCE?

On April 17, 2014, the United States Bankruptcy Judge Sean H. Lane issued an opinion in the Waterford Wedgwood bankruptcy discussing at length one of the defenses available to preference defendants.  The opinion turns upon the scope of “ordinary business terms,” the objective prong of the ordinary course of business defense.

Once might be considered an aberration. Is twice the new normal?

The District Court for the Southern District of New York in Lehman Brothers recently threw cold water on a growing body of cases that permit compensation of professional fees incurred by individual members of official committees of unsecured creditors.

As predicted, the court in Tokyo has ruled that Mt. Gox will be liquidated. An “Announcement of Commencement of Bankruptcy Proceedings” was posted overnight April 24 by the Japanese bankruptcy trustee Nobuaki Kobayashi on the Mt. Gox site to confirm that the company is officially in bankruptcy (liquidation) in Japan.  The Announcement also includes a “Frequently Asked Questions” section to give a very high level overview of the liquidation process.