Recent Developments In Law Of Deepening Insolvency

Law360, New York (November 24, 2009, 4:28 PM EST) -- On May 13, 2009, in In re Norvergence Inc., the United States Bankruptcy Court for the District of New Jersey was asked to decide a motion to dismiss, among other counts, a bankruptcy trustee’s claim denominated “deepening insolvency.”

The bankruptcy court predicted that New Jersey would recognize a tort of “deepening insolvency,” although the court acknowledged that no New Jersey court had yet approved such a cause of action and also that, in Pennsylvania and Delaware, “[r]ecent case law ... limited the availability of deepening insolvency...
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