Murky Waters After Bayou Reversal

Law360, New York (November 2, 2010, 3:42 PM EDT) -- In a partial reversal of a decision from Bayou Group LLC's bankruptcy case, the U.S. District Court for the Southern District of New York reconsidered a controversial ruling that sent shivers down the spines of institutional investors in 2008. See In re Bayou Group LLC, No. 09 Civ. 02577 (S.D.N.Y. Sept. 17, 2010).

Specifically, the district court found the bankruptcy court's legal reasoning faulty in deciding that, as a matter of law, all money paid out to redeeming investors within the reachback period could be avoided...
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