Debtor V. Debtor: Limits On Claims Discharge

Law360, New York (March 9, 2009, 12:00 AM EDT) -- As corporate bankruptcy filings increase, one debtor corporation is more likely to find that it has claims against another unaffiliated debtor corporation. The U.S. Bankruptcy Code is generally not drafted with this situation in mind, and questions may arise regarding the effect of one debtor's bankruptcy on another's.

Recently, the Southern District of New York Bankruptcy Court considered whether the avoidance actions pursued in the bankruptcy of OneStar under Sections 547 and 549 of the Bankruptcy Code[1] could be maintained against WorldCom, which had confirmed in...
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