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Can the Claims of Individual Creditors Be Assigned to a Litigation Trust?
Consider this familiar fact pattern: A small group of bondholders believe that they were misled by a debtor's management about the company's financial situation shortly before the company filed for bankruptcy, and no class action has yet been filed for securities fraud or related claims. The debtor quickly sells its assets and agrees with the creditors committee to file a plan that creates a litigation trust to litigate possible causes of action for the benefit of the creditors. Can the plan provide that the securities claims ' which are not estate causes of action because they belong to the bondholders individually, not to the company ' will be assigned to the trust so that the trust can efficiently litigate these claims and distribute the proceeds thereof to the bondholders?
Until recently, the answer certainly would have been “no”; several cases have held that a plan can not vest a litigation trust with the claims of individual creditors and instead is limited to litigating and collecting claims that belong to the estate. However, recent decisions from the Second and Fourth Circuits as well as dicta in a recent opinion from the Third Circuit suggest that the answer now is “maybe.” This article explores the history, the more recent case law and the open issues, which could be important in structuring a plan in future cases.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.