Are Insolvent Corporations Hurt By More Debt?

Law360, New York (January 18, 2011, 4:13 PM EST) -- In the first Pennsylvania state court decision of its kind, the Court of Common Pleas of Allegheny County refused to recognize “deepening insolvency” as a theory or measure of damages in a Chapter 11 liquidation trustee’s professional negligence claim against the law firm K&L Gates LLP.[1]

As a result, the court dismissed the trustee’s complaint for failure to allege any legally cognizable claim for damages resulting from the allegedly negligent conduct. The court reached its decision based on the trustee’s inability to answer satisfactorily a simple...
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