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The Debtor's 'Insolvency' for Avoidance Actions
The concept, definition, and construction of “insolvency” are of central importance to the avoidance provisions of the Bankruptcy Code. Not surprisingly, there are many other areas of bankruptcy practice, including threshold filing issues in both a voluntary and involuntary context, issues of good faith in filing, and numerous causes of action and claims which, while not specifically creations of the Bankruptcy Code, fall within the ambit of insolvency, including deepening insolvency and “zone of insolvency” analyses.
There is, however, no precise definition of “insolvency” that is used consistently in a bankruptcy context. The term “insolvency” is defined in section 101(32) of the Bankruptcy Code, as a “financial condition such that the sum of [an] entity's debts is greater than all of such entity's property, at a fair valuation.” This “balance sheet” test, while most consistently invoked in the preference and fraudulent transfer sections of the Code, has also been applied in the context of a cause of action for “deepening insolvency,” see, e.g., Official Committee v. R.F. Lafferty & Co., Inc., 267 F.3d 340, 349 (3d Cir. 2001), as well as in causes of action involving the so-called “zone of insolvency,” see, e.g., In re Brentwood Lexford Partners, LLC, 292 B.R. 255 (Bankr. N.D. Tex. 2003). Additionally, while the Code currently imposes no explicit insolvency threshold for filing voluntary and involuntary petitions, the issue frequently arises in that context where the good faith of the filing is questioned. See, e.g., In re Sullivan County Regional Refuse Disposal Dist., 165 B.R. 60 (Bankr. D.N.H. 1994).
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.
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.
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.
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.
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.