Committee Meeting at 2004 Winter Leadership Conference
The Public Company & Claims Trading Committee will hold a meeting on Saturday, Dec. 4, at the 2004 Winter Leadership Conference. Thomas Moers Mayer of Kramer Levin Naftalis & Frankel LLP will be discussing claims-trading issues. The issues will include whether claims-trading freezes are ever economically justified. Tom and Chaim T. Fortgang are authors of a seminal work in the claims-trading area, Trading Claims and Taking Control of Corporations in Chapter 11, 12 Cardozo L. Rev. 1 (1990). Tom has also written a paper, “Liquidity, Disclosure and their Enemies: Securities Issues and Freezes in Chapter 11,” which presents a thesis that restrictions on claims trading for publicly held companies to preserve net operating losses under the Internal Revenue Code are almost never economically justified.
Are U.S. Courts Developing a U.K. Approach to the Liability of Directors of Insolvent Companies?
by Glenn E. Siegel and Paul S. Rosen
As creditors of insolvent and nearly insolvent companies struggle with recovering the amounts they are owed, they have increasingly sought relief against directors (and sometimes officers) of their debtors. Many of these cases seek to hold directors liable on the theory that they violated a duty owed directly to creditors because the company was insolvent or in the “vicinity of insolvency.” Indeed, some actions seem to take the position that, so long as directors allow a company to operate while a company is in extremis, they should be held liable to creditors for the decrease in the net value of the corporation’s assets when the company first came into the vicinity of insolvency until creditors are paid on their claims.
This article will discuss whether these cases are the beginning of a trend toward increasing the liability of directors to their companies by moving to an approach similar to the United Kingdom (U.K.) doctrine of liability for directors who allow their companies to engage in “wrongful trading.”
Bank Syndicates and the Trading of Claims
As presented at the 2004 Northeast Bankruptcy Conference
- Claims Trading—An Overview of Issues by Joel Brighton and Charles L. Glerum
- Loan Trading in the Secondary Market: Closing a Distressed Trade—Key Risks and Concerns by Jane Summers, Stephen Ewald and Jennifer Mink