"Enron" May Protect Transferees Of Tainted Claims

Law360, New York (September 12, 2007, 12:00 AM EDT) -- Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York recently vacated and remanded a decision in the Enron bankruptcy case, possibly having significant implications for all creditors, particularly parties to claims transfers.

If the decision is followed, creditors could see a reduction in recoveries because transferred claims formerly subject to challenge may be allowed, thereby increasing the total claims against the estate.

Lenders may be less cautious about taking aggressive positions because they may now have the ability...
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