Classifying Creditors In Digital Asset Bankruptcy Cases

As digital asset markets continue to struggle, and multiple digital asset platforms seek refuge in Chapter 11 proceedings, courts will be confronted with several novel issues.

A previous article addressed how traditional bankruptcy recovery mechanisms might operate when the recoverable assets are digital assets recorded on a blockchain. This article discusses another critical issue: how digital asset customers will be classified under the Bankruptcy Code. The resolution of this thorny issue will significantly impact the […]

By | September 30th, 2022 ||

U.S. Bankruptcy Code Safe Harbors Protect Against Foreign Law Avoidance Claims Under Chapter 15

The U.S. Bankruptcy Code’s safe harbor provisions provide comfort to financial institutions that transfers made under protected financial contracts will generally not be subject to avoidance or “clawback” if the transferor subsequently files for bankruptcy protection under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code. But is the same true where the transferor is a foreign debtor whose main insolvency proceeding is occurring outside the United States, and whose representatives merely petition […]

By | September 28th, 2022 ||

Second Circuit Rules That Bankruptcy Courts May Award Appellate Legal Fees As Sanction For Contempt

Courts disagree whether a bankruptcy court, in exercising its broad equitable powers, has the authority to award appellate legal fees as a sanction for contempt. The U.S. Court of Appeals for the Second Circuit recently weighed in on this issue as an apparent matter of first impression. In Law Offices of Francis J. Reilly, Esq. v. Selene Finance, L.P. (In re DiBattista), 33 F.4th 698 (2d Cir. 2022), the Second Circuit held that a bankruptcy […]

By | September 20th, 2022 ||