LexisNexis® Legal Newsroom
How Much Control Does a Trustee Have in a Ponzi Scheme Case?

Consider three recent events in the Bernard Madoff Ponzi scheme case, which demonstrate a certain unevenness and perhaps even inconsistency in the authority vested in the trustees who are administering these types of cases. Trustees act under the authority of the Bankruptcy Code or the Securities Investor...

Ninth Circuit Gives Some Protection to Both Bloggers and Trustees

The case of self-proclaimed "investigative blogger" Crystal Cox took another turn as the Ninth Circuit reversed and remanded the case against her. The decision gives greater First Amendment protection to bloggers than the stingy view taken by the District Court. However, it also recognizes...

Jumping Through Hoops to Get Trustee Standing in Ponzi Scheme Cases

In Ponzi scheme cases, the issue of trustee standing to bring third party claims can be very challenging. The Supreme Court has made clear that a trustee may pursue the debtor’s claims against third party defendants, but may not pursue creditors’ claims. Caplin v. Marine Midland Grace Trust...

U.S. Supreme Court Denies Hearing on Liquidation of Assets Belonging to Bankrupt Farm

WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court today refused to hear a case in which a Chapter 11 debtor, which was also a farm, argued that the Chapter 11 trustee wrongly liquidated its assets in violation of the Bankruptcy Code ( Robert A. Sears, et al. v. Joseph H. Badami , No. 13...

Can a Receiver and a Trustee, Who Are the Same Person, Settle with Himself?

Thomas J. Petters’ $3.65 billion Ponzi scheme has raised all kinds of interesting legal issues, the most recent of which involves the interplay between Thomas Petters’ individual receivership estate and the bankruptcy of Petters’ companies. David Kelley was first appointed as the receiver...

Ponzi Scheme Trustee’s Claws Do Not Always Reach Overseas

Bankruptcy trustees often sue to avoid and recover fraudulent transfers pursuant to the provisions of the Bankruptcy Code. These are often referred to as “clawback” actions. Transfers of property of a debtor may be avoided pursuant to section 548 and may be recovered from the initial transferee...

No More Ugly American: Judge Refuses to Allow Madoff Trustee to Pursue Foreign Indirect Investors

by Ben Feder Judge Jed S. Rakoff of the Southern District of New York last week ruled that the U.S. Bankruptcy Code does not permit a bankruptcy trustee to recover foreign transfers [ an enhanced version of this opinion is available to lexis.com subscribers ]. Specifically, Judge Rakoff refused to...

Energy Future Holdings' Make-Whole Ruling Extends Rationale of Important SDNY Decisions to Delaware

by Ben Feder Judge Christopher Sontchi issued a notable opinion last week in the bankruptcy case of Energy Future Holdings Corp. , et al . (“EFH”), Case No. 14-10979 (D. Del.), ruling that the repayment in full of certain senior secured notes did not trigger an obligation by the debtors...