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LaSala v. Bordier et Cie, 49 BCD P 177 (3d Cir. 2008) (permitting trustee action against banks for facilitating fraud; SLUSA is n/a; trustee can prosecute claims of individual purchasers who assigned claims but were not cognizable under Delaware law).
In re Friedman's Inc., 385 B.R. 381 (S.D. Ga. 2008) (legal malpractice claim against outside counsel not barred by in pari delicto; here, firm was advising independent directors on investment as to which controlling shareholder was interested party and firm gave bad advice).
Hope springs eternal and creditors continue, without much success, to assert a constructive trust or other right in commingled funds held by debtors. See In re M&S Grading, Inc., 541 F.3d 859 (8th Cir. 2008) (unpaid employer contributions to employment benefit plans were property of the estate subject to creditor claims even though court had ordered trustee to contribute to plans; assets of debtor don't become plan assets simply because debtor has legal obligation to make the payments); In re Pay + Payyroll Administrators, 389 B.R. 796 (Bk. M.D. Fla. 2008) (funds remitted to debtor and commingled not trust funds).
Adelphia Recovery Trust v. Bank of America, ___B.R. ___ (S.D.N.Y. 6/18/08) (no avoidance action on behalf of solvent debtor where solvent debtor was not substantively consolidated with other debtors).
A number of cases involve payments to shareholders in buyouts which were potentially avoidable as fraudulent conveyances which courts held were protected under section 546(b). See Contemporary Ind. Corp. v. Frost, 2009 WL 1159174 (8th Cir. 2009) (wire transfer to purchase stock of company which was not publicly traded were settlement payments under 546(e)); In re Elrod Holdings Corp., 394 B.R. 760 (Bk. D. Del 2008) (applies even though stock not publicly traded); In re Plassein Int'l Corp., 388 B.R. 46 (D. Del. 2008) (same); In re Stewart Fin. Co., 367 B.R. 900 (Bk. M.D. Ga. 2007) (transfers to broker to pay margin debt of debtor's principal were within margin payment/settlement definitions and it made no difference that the recipient was not the debtor's broker); In re IT Group, Inc., 359 B.R. 97 (Bk. D. Del. 2007) (payment for stock was settlement payment); In re Quality Stores, Inc., 355 B.R. 629 (Bk. W.D. Mich 2006) (in LBO, shareholders paid for stock through bank; court held statute clearly required the result even though there was a question whether Congress intended section 546(b) to apply only to routine public transactions); In re National Forge Co., 344 B.R. 340 (W.D. Pa. 2006) (payments for stock made to financial institution and were protected). Contra In re Norstan Apparel Shops, Inc., 367 B.R. 68 (Bk. E.D.N.Y. 2007) (payment to shareholders for interests in sub S corporation in connection with LBO not protected; to be protected under 546(e) as a settlement payment, the transaction must involve public securities and here the purchased stock was not publicly traded); In re Manhattan Inv. Fund Ltd., 359 B.R. 510 (Bk.
©2009 Jonathan M. Landers
