The End of Deepening Insolvency?
By: Douglas E. Deutsch
Chadbourne & Parke LLP; New York
Over the last 10 years or so, courts have frequently recognized a deepening insolvency cause of action brought against pre-bankruptcy petition officers and directors, lawyers, accountants, bankers and other professionals. Based on the premise that a corporation "is not a biological entity for which it can be presumed that any act which extends its existence is beneficial to it," see In re Global Service Group LLC, 316 B.R. 451, 457 (Bankr. S.D.N.Y. 2004) (citing Bloor v. Dansker (In re Investors Funding Corp. of New York Sec. Litig.), 523 F.Supp. 533 (S.D.N.Y. 1980)), the essence of the action is that the debtor corporation's life has been improperly prolonged beyond insolvency, resulting in damages caused by increased debt.
Would You Like to See Your Work Published in the ABI Journal?
ABI is happy to announce that the Journal will begin publishing a Young and New Member column. It is expected that the column will be published approximately every other issue depending on, among other things, ABI Journal space limitations.
Anyone interested in contributing should pick a topic that is appropriate for young and new members (we believe most articles will easily fall into this description), make sure that the Journal has not written something on this same point in recent history, draft an original article in conformity with the ABI Journal "Style Sheet and Editorial Guidelines" (see http://www.abiworld.org/journalguidelines), and send the proposed article to Doug Deutsch.
One outstanding article submitted will be published in the ABI Journal. All other articles may be published in the YNMC newsletter. The YNMC also invites all members to write articles for the newsletter. Such articles should also be submitted to Doug Deutsch. Frequent quality submissions to the YNMC newsletter may be used as a factor for consideration in selecting an article for submission to the ABI Journal.