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Bankruptcy Code Clawbacks

Falcon Rappaport & Berkman LLP

Understanding Celsius Network Adversary Proceedings: An Insight into the Complexities of Bankruptcy Claims

The Celsius Network bankruptcy case is a landmark event in the cryptocurrency world, not just because of the scale of financial failure but due to the complex legal battles it has ignited against tens of thousands of consumer...more

Morris James LLP

The Clawback Process in Bankruptcy: What You Need to Know

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The clawback provisions in the U.S. Bankruptcy Code are essential tools for protecting a bankruptcy estate and creditors' interests from preferential or fraudulent asset transfers that deplete estate funds and negatively...more

Nelson Mullins Riley & Scarborough LLP

Emerging Issues in Crypto Bankruptcies

The new frontier of crypto bankruptcies brings with it unique challenges. As more crypto platforms face financial distress and insolvency, investors find themselves navigating the intricacies of the Bankruptcy Code in a...more

Goodwin

Complicit Defendants Lose, Sovereign Agency Wins in Eternal Madoff Litigation

Goodwin on

Two recent decisions in the Madoff bankruptcy cases illustrate that the legacy of Bernie Madoff will long survive the man himself. Bernie Madoff died on April 14, 2021, while incarcerated in the Federal Medical Center in...more

Patterson Belknap Webb & Tyler LLP

A Primer on Avoidance Actions in the Context of Crypto Bankruptcies

In 2022, there were several high-profile crypto bankruptcy filings.  A big question in these cases is whether there will be any money to satisfy unsecured creditor claims.  If there are funds to distribute, then the...more

Bracewell LLP

Fifth Circuit Rules Just Energy Bankruptcy Court Erred in Exercising Jurisdiction to Redetermine ERCOT Pricing During Winter Storm...

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In a January 5, 2023 opinion from the United States Court of Appeals for the Fifth Circuit, the panel held the Just Energy bankruptcy court erred in exercising jurisdiction over the debtor’s suit to recover Winter Storm Uri...more

UB Greensfelder LLP

Chasing the Crypto: Why a Ruling in the Madoff Case May Significantly Expand the Universe of FTX Clawback Defendants

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While there are still many unknowns in FTX’s bankruptcy including what, exactly, happened to billions of dollars of customer deposits on the former crypto trading platform, one thing is almost certain: there will be an...more

Holland & Knight LLP

Holland & Knight's China Practice Newsletter: November-December 2021

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Holland & Knight invites you to read our China Practice Newsletter, in which our authors discuss pertinent Sino-American topics - HIGHLIGHTS: Preference Claims Clawbacks in Bankruptcy Can Disrupt a Construction...more

Dorsey & Whitney LLP

Why Avoidance Actions Are Difficult to Dismiss by a Rule 12(b)(6) Motion

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Traditional avoidance actions under the Bankruptcy Code, i.e., preferences and fraudulent transfers, have laudable goals: (a) to provide equal treatment to creditors of an insolvent company and (b) to claw back otherwise...more

PilieroMazza PLLC

Protecting Your Company Against Revenue Clawbacks: Preference Actions (Part 3 of 3)

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This is the final part of our three-part series on revenue clawbacks. The scenario: a customer or teaming partner goes bankrupt and then they (or a trustee) demand you return money they already paid you for services or goods...more

Mintz - Bankruptcy & Restructuring Viewpoints

Consolidated Appropriations Act of 2021 Amends Bankruptcy Code - Part 3: Congress Gives Suppliers and Landlords a Shiny New Arrow...

As discussed in previous posts, the Consolidated Appropriations Act of 2021 (the “Act”) was signed into law on December 27, 2020, largely to address the harsh economic impact of the COVID-19 pandemic. For bankruptcy...more

Bowditch & Dewey

Rent Abatement, PPP Loans (Maybe), and Other Bankruptcy Relief in the Appropriations Act

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On December 27, 2020, the Consolidated Appropriations Act, 2021 became law. In addition to funding the government and providing coronavirus relief, the Act contains several intriguing amendments to the Bankruptcy Code. The...more

Allen Matkins

Consolidated Appropriations Act Provides Bankruptcy Preference Liability Protections for Landlords

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The Consolidated Appropriations Act of 2021 (Public Law 116-260) (the Act) contains an important change in bankruptcy law beneficial to landlords of nonresidential properties. Among several amendments to the Bankruptcy Code...more

PilieroMazza PLLC

Protecting Your Company Against Revenue Clawbacks: Preference Actions (Part 1 of 3)

PilieroMazza PLLC on

A customer goes bankrupt and then they (or a trustee) demand you return money you were already paid for services or goods duly rendered. In this three-part series, we discuss strategies to protect your company against these...more

Dechert LLP

No Futility Exception: Where Transferee is on “Inquiry Notice,” No Good Faith Defense to Fraudulent Transfer Clawback Absent...

Dechert LLP on

Answering “no” to a certified question from the Fifth Circuit, the Supreme Court of Texas held that a transferee on inquiry notice of fraud cannot shield itself from clawback without diligently investigating its initial...more

Pullman & Comley, LLC

First Circuit Holds that Parents' Payment of Tuition for an Adult Child Can Be Avoided as a Fraudulent Transfer: Colleges,...

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Bankruptcy trustees continue to vigorously pursue actions in which they sue colleges, universities and other institutions of higher education to recover tuition payments made by parents for their children when the parents...more

Bradley Arant Boult Cummings LLP

First Circuit Holds that Parents’ Tuition Payments for Adult Children Are Fraudulent Transfers

Recently, the First Circuit held that a parent’s tuition payments on behalf of an adult child do not benefit the parent’s bankruptcy estate, and a Chapter 7 trustee may therefore claw the payments back as fraudulent...more

Moritt Hock & Hamroff LLP

Trustee Litigation Trend: Tuition Clawback

“An investment in knowledge always pays the best interest.” Benjamin Franklin, The Way to Wealth: Ben Franklin on Money and Success (1758). For parents paying their adult child’s college education costs, however, this...more

Mintz - Bankruptcy & Restructuring Viewpoints

Decade Old Transactions Potentially Subject to Bankruptcy Clawback in Massachusetts

Transfers and transactions up to ten years old may be scrutinized, unwound and recovered by a trustee, the bankruptcy court sitting in Massachusetts recently held in the NECCO (think chalky wafer candy) bankruptcy case. The...more

Foley & Lardner LLP

Storm Preparation: Dealing With Financially Troubled Companies and Avoiding Clawbacks

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The current state of the U.S. economy is relatively strong. That said, every economy remains subject to the normal ups and downs of the business cycle. Eventually, dark clouds will gather and businesses will be required to...more

Patterson Belknap Webb & Tyler LLP

Bankruptcy Avoidance Actions Under Section 544(b): State Fraudulent Transfer Statutes and More

Creditors’ recoveries often hinge on claw-back lawsuits that trustees bring under bankruptcy law and non-bankruptcy law. Trustees can file claims based on non-bankruptcy law because Bankruptcy Code section 544(b) allows them...more

Tucker Arensberg, P.C.

Are College Tuition Payments Subject to Claw Back by Bankruptcy Trustees? - It Depends.

Tucker Arensberg, P.C. on

Bankruptcy Courts throughout the country are split on the socially charged issue of whether tuition payments made by parents for their adult children can be recovered by a bankruptcy trustee as “constructively fraudulent”...more

Hogan Lovells

New U.S. Second Circuit Court of Appeals ruling in Madoff liquidation extends the long arm of fraudulent transfer law

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In a unanimous 25 February panel decision, the Second Circuit Court of Appeals held that the trustee liquidating Bernard L. Madoff's investment firm can claw back billions in Ponzi scheme proceeds from investors who received...more

Latham & Watkins LLP

Second Circuit Backs Foreign Clawback Claims in Madoff Bankruptcy Action

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The Second Circuit holds that the presumption against extraterritoriality and international comity do not bar recovery of purely foreign transfers. Key Points: ..The Second Circuit focused on the initial transfer from...more

Pullman & Comley, LLC

Another Bankruptcy Court Weighs in on the Tuition Clawback Controversy

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Bankruptcy trustees continue to vigorously pursue actions in which they attempt to “clawback” tuition paid by parents to colleges, universities and other institutions of higher education for their adult children’s...more

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