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One of the rare legal issues in which bankruptcy practitioners usually are able to speak to clients in absolute terms to provide clear legal advice is the limitations period concerning the pursuit of avoidable transfers in bankruptcy proceedings. Section 546 of the Bankruptcy Code is clear that a trustee has two years after the order for relief to bring an avoidable transfer action. Section 548 of the Bankruptcy Code equally is clear that the trustee may pursue avoidable transfers that occurred within two years prior to the filing of a bankruptcy petition. And Section 544(b) of the Bankruptcy Code provides the trustee with “strong-arm” powers to avoid a transfer that is voidable “under applicable law” by a creditor holding an unsecured claim. This means that the trustee may look to non-bankruptcy law (usually state law) and deploy any avoiding power that the trustee finds there. The most common use of Section 544(b) is to give the trustee a right of action under state fraudulent transfer law. These are most often useful to the trustee because of the longer reach-back period available under state law, which generally range from three to six years prior to the petition date.
By Brian L. Shaw and Christina M. Sanfelippo
How Low Can You Go?
In In re B.C.I. Finances Pty Limited, Judge Sean Lane reiterated the low domestic presence threshold (Domesticity) that a foreign representative must meet when it is petitioning for recognition of a foreign proceeding under Chapter 15.
By David Kupetz and Asa Hami
Store closing or liquidation sales are a routine part of Chapter 11 cases involving retail debtors. These sales are consistently authorized by bankruptcy…
By Deborah Williamson, Mark Andrews and Richard Y. Cheng
Many community hospitals are in distress. The causes are varied but have a constant theme — the cost to adapt to a rapidly changing environment.
By Michael L. Cook
“Federal law does not prevent a bona fide shareholder from exercising its right to vote against a bankruptcy petition just because it is also an unsecured creditor,” held the U.S. Court of Appeals for the Fifth Circuit in In re Franchise Services of North America, Inc. According to the court, applicable Delaware law would not “nullify the shareholder’s right to vote against the bankruptcy petition.”