Limiting Trustee Remedies In Lien Avoidance Actions

Law360, New York (July 17, 2009, 12:57 PM EDT) -- A recent ruling in the Bankruptcy Appellate Panel for the Tenth Circuit limiting remedies in lien avoidance actions may have a significant impact on bankruptcy trustees, as well as on secured lenders, especially consumer lenders.

The ruling rejects a remedy sometimes granted by bankruptcy courts that heavily favored bankruptcy trustees. Now, the interpretation of remedies will favor the secured creditors whose liens are challenged.

In a reported case of first impression in the Circuit, the Bankruptcy Appellate Panel for the Tenth Circuit has rejected an interpretation...
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