Bankruptcy Avoidance Actions: Navigating the Evolving Standards

Pursuing and Defending Preference and Fraudulent Transfer Actions

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Wednesday, June 10, 2009

Course Materials

This seminar will discuss the standards and best practices for prosecuting and defending bankruptcy avoidance actions and analyze the Bankruptcy Code's limitations on and safe harbors for avoidance actions.

Description

As corporate bankruptcies soar, avoidance actions are affecting numerous lenders and vendors. These actions create uncertainty in the current economic decline because creditors are wary of doing business with distressed companies for fear of losing money or collateral in an avoidance action.

For trustees, effective and efficient recovery of payments maximizes distribution to the class of creditors. For creditors, protecting their collateral or monies received from the debtor may be critical to the financial bottom line of the business.

The standards for bringing avoidance actions, defenses to avoidance actions and limitations and safe harbors are constantly evolving and case law is inconsistent among circuits. Thus, it is essential that bankruptcy attorneys understand all of the nuances of avoidance litigation.

Listen as our panel of bankruptcy attorneys discusses case law developments in the area of avoidance litigation and provides best practices for prosecuting and defending avoidance actions.

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Outline

  1. Pursuing Avoidance Actions
    1. Chapter 5 actions
    2. Preferences; fraudulent transfers
    3. Liens on avoidance actions; releases
    4. Assignment of avoidance actions; standing
    5. State preference statutes
  2. Defending Avoidance Actions
    1. Defending preference actions
      1. Attacking plaintiff’s prima facie case
      2. Ordinary course of business
      3. New value
      4. Contemporaneous exchanges
      5. Other defenses
    2. Defending fraudulent transfer actions
  3. Limitations of Avoidance Powers
    1. Mechanics liens
    2. Reclamation
    3. Margin, settlement payments, securities contracts
    4. Repurchase agreements
    5. Swaps
    6. Master netting agreements

Benefits

The panel will review these and other key questions:

  • Under what circumstances may creditors bring avoidance actions?
  • How are assets of the estate valued in determining whether the debtor is insolvent at the time of a transfer?
  • What defenses do refinancing lenders have to avoidance actions and why timely perfection of the lien or security interest is critical?
  • Does the discharge of claims by one bankrupt estate distinguish claims against it by another bankrupt estate?

Faculty

Brian E. Greer
Brian E. Greer
Partner
Dechert

He has substantial experience in complex out-of-court and in-court restructuring matters. His practice focuses on the...  |  Read More

Steven M. Yoder
Steven M. Yoder
Partner
Potter Anderson & Corroon

He is in the firm's Bankruptcy and Corporate Restructuring practice and heads the firm's representations of debtors....  |  Read More

Frederick B. Rosner
Frederick B. Rosner
Partner
Messana Rosner & Stern

His practice focuses on debtor's and creditor's rights as well as secured transactions, commercial litigation and...  |  Read More

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