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Bankruptcy and Fraud: The Ties That Bind?
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, among other things, consider the potential impact of current economic pressures on financial controls and the risk of fraud during a restructuring, when headcount is reduced, morale is eroded, and risk mitigation can inadvertently take a back seat to the day-to-day focus of management.
A 2008 study by the Deloitte Forensic Center and Deloitte's Reorganization Services group found that companies filing for bankruptcy protection (“Bankrupt Companies”) are three times as likely as non-Bankrupt Companies to face enforcement action by the SEC for financial-statement fraud allegedly committed pre-petition. Conversely, companies that were the subject of SEC enforcement releases related to financial-statement fraud were more than twice as likely to file for bankruptcy protection than companies that were not.
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.
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.