Hobgoblins Return To Haunt Bankruptcy Claims Traders

Law360, New York (October 1, 2012, 1:25 PM EDT) -- Participants in the multibillion-dollar market for distressed claims and securities have had ample reason to keep a watchful eye on developments in the bankruptcy courts during the last decade. That vigil appeared to have been over five years ago, after a federal district court ruled in the Enron Corp. Chapter 11 cases that sold claims are generally not subject to equitable subordination or disallowance on the basis of the seller’s misconduct or receipt of a voidable transfer. A ruling recently handed down by a Delaware bankruptcy...
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