Pleading Standards Under Section 544(b)(1)

Law360, New York (April 3, 2009, 12:00 AM EDT) -- As the United States experiences the greatest financial crisis since the Great Depression, avoidance actions are likely to assume a more prominent role in bankruptcy cases.

The Bankruptcy Code contains a number of avoidance sections under which a debtor-in-possession or an authorized representative may seek to avoid prepetition obligations or transfers.

Among these sections is Bankruptcy Code section 544(b)(1), which estate representatives use as a conduit to assert fraudulent conveyance actions based on state law.

See 11 U.S.C. § 544(b)(1) (providing that a trustee may avoid...
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