Debts for a Partner’s Fraud Are Confirmed to be a Nondischargeable Debt According to the Supreme Court’s Opinion
In a unanimous opinion by the Supreme Court, the Court held an innocent partner liable for the fraud of another partner. Should the innocent party declare bankruptcy, the bankruptcy code would bar a discharge of the debt because it was obtained by false pretenses, a false representation or actual fraud. In Bartenwerfer v. Buckley, prior […]
THE (NOT SO) SAFE HARBOR DEFENSE
Dealing with a financially distressed customer? Considering how to avoid a fraudulent transfer a claw-back in the customer were to seek bankruptcy protection? Some creditors have attempted to shield themselves from such actions by conducting the transfers through a financial institution. Well, not so fast. In the case of FTI Consulting, Inc. v. Merit Mgmt. […]
A BALANCE OF POWER
WHICH LEVEL COURT IS BEST POSITIONED TO DECIDE THE QUESTION OF “INSIDER” STATUS UNDER THE BANKRUPTCY CODE? Determining whether a creditor or interested party to a bankruptcy proceeding is an “insider” is often critical. In Chapter 11 proceedings, if the Bankruptcy Court determines a creditor to be an insider, then he or she is not […]
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