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Full-Text Articles in Law
Midnight In The Garden Of Good Faith: Using Clawback Actions To Harvest The Equitable Roots Of Bankrupt Ponzi Schemes, Jessica D. Gabel
Midnight In The Garden Of Good Faith: Using Clawback Actions To Harvest The Equitable Roots Of Bankrupt Ponzi Schemes, Jessica D. Gabel
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This paper addresses an increasingly relevant issue in bankruptcy – does it make sense to protect “good faith” investors who have invested (some quite profitably) in a Ponzi scheme from clawback actions by the trustee? This article presents issues of economic equity (equitable payouts to individual creditors vs. equitable distribution among all creditors); bankruptcy policy (retaining antiquated notions of good faith in an ever-evolving financial playground); and judicial inconsistency (disparities in the treatment on Ponzi investors). * In the aftermath of the financial crisis, investors have attempted to pull their money back from the markets, collapsing hundreds of Ponzi schemes …
The Terrible TousaS: Opinions Test The Patience Of Corporate Lending Practices, Jessica D. Gabel
The Terrible TousaS: Opinions Test The Patience Of Corporate Lending Practices, Jessica D. Gabel
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Two diametrically opposed decisions pit creditors against debtors. The case of troubled homebuilder TOUSA has generated shockwaves through the lending industry. Set against the backdrop of the housing collapse and risky lending, the bankruptcy court’s decision left secured creditors with a mixture of shock, anger, and worry over the repercussions. In that opinion, the bankruptcy court unwound a nearly $1 billion transaction of liens and loan proceeds, on grounds that the transactions drove the debtor company into the ground. In other words, the court found that a fraudulent transfer had occurred. Not surprisingly, the lenders appealed and the next decision …