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Feb 02, 2016

United States Bankruptcy Court for the Southern District of New York Holds That Avoidance Powers Can Be Applied Extraterritorially, Resulting in a Split Within the Southern District of New York

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On January 4, 2016, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) deviated from SDNY precedent and held that, despite the absence of clear Congressional intent, the avoidance powers provided for under Section 548 of the Bankruptcy Code can be applied extraterritorially. As a result, a fraudulent transfer of property of a debtor’s estate that occurs outside of the United States can be recovered under Section 550 of the Bankruptcy Code. This ruling creates a split among courts within the Southern District of New York regarding the reach of avoidance powers when it comes to the recovery of extraterritorial property.

View full memo, United States Bankruptcy Court for the Southern District of New York Holds That Avoidance Powers Can Be Applied Extraterritorially, Resulting in a Split Within the Southern District of New York

Authors and Contributors

Fredric Sosnick

Partner

Financial Restructuring & Insolvency

+1 212 848 8571

+1 212 848 8571

New York

Joel Moss

Partner

Financial Restructuring & Insolvency

+1 212 848 4693

+1 212 848 4693

New York

Solomon J. Noh

Partner

Financial Restructuring & Insolvency

+44 20 7655 5795

+44 20 7655 5795

London

Ned S. Schodek

Partner

Financial Restructuring & Insolvency

+1 212 848 7052

+1 212 848 7052

New York