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Effects Of Veil Piercing, Alter Ego And Substantive Consolidation On Bankruptcy, Lauren Gross

Bankruptcy Research Library

(Excerpt)

At times, bankruptcy can seem like a game of cat and mouse between debtors and creditors. By filing for bankruptcy in the first place, debtors change the rules of the game with various bankruptcy mechanisms, such as the automatic stay provision set forth in section 361 of the United States Bankruptcy Code (the “Bankruptcy Code”). An important inquiry exists in what creditors can to do promote their interests in bankruptcy. An even more important inquiry lies in determining what doctrines may satisfy generally recognized principles of equity for all.

One option for creditors who deal with corporate entities is …

Bankruptcy - Sufferance Of Turnover Order As An Act Of Bankruptcy, John C. Johnston

Michigan Law Review

A parent corporation formed a subsidiary corporation in 1932, and transferred to the subsidiary certain of its assets. In 1938 the parent filed a voluntary petition in bankruptcy and was adjudicated a bankrupt. Over a year later the referee entered a turnover order requiring the subsidiary to transfer to the parent's trustee all of its assets on the ground that the original transfer was void as being in fraud of creditors, and on the further ground that the subsidiary was in fact the "alter ego" of the parent corporation. Three days after this order was issued, creditors of the subsidiary …