As economic turmoil continues, many companies face erosion of revenues, pressure for cost containment, and diminished liquidity. Filing for bankruptcy protection is sometimes part of the solution. In-house counsel should,
Bankruptcy and Fraud: The Ties That Bind?
In the current environment, factors such as a shortfall in assets, lack of debtor-in-possession financing and absence of potential buyers may make liquidation the only recourse in bankruptcy. With fewer dollars to satisfy claims, creditors may resort to litigation, alleging fraud as a means for obtaining recoveries. This could lead to additional exposures for directors and officers at companies facing bankruptcy.
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