Cross Border Bankruptcy Issues Faced by Private Funds

Although growth opportunities exist in every economy in the global marketplace, the United States offers many attractive options for investment to multinational corporations, smaller national businesses, regional concerns and individual foreign investors. While cross-border deals and investments offer unique opportunities, they also bring specialized risks when companies struggle or become insolvent and seek bankruptcy protection under US law. The United States Bankruptcy Code provides trustees with broad powers to rescind pre-bankruptcy transactions, even when those transactions take place offshore and between non-U.S. parties if the funds originate with the bankrupt U.S. debtor. This CLE discusses a recent ruling by the Second Circuit issued in the Madoff liquidation and its far-reaching implications for cross-border funds, led by the Madoff Trustee’s counsel here in the United States as well as his UK counsel who will provide a foreign perspective.