Dealing a major blow to the trustee’s efforts to recover fraudulent transfers on behalf of the bankruptcy estate of the company run by Bernard Madoff, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York held in SIPC v. Bernard L. Madoff Investment Securities LLC that the Bankruptcy Code cannot be used to recover fraudulent transfers of funds that occur entirely outside the United States. The decision is likely to have far-reaching implications for other cross-border insolvency cases.
