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Bankruptcy Litigation

Paul LLP is experienced in representing trustees, receivers and creditors across the country prosecuting a variety of claims arising out of or related to a pending bankruptcy case. There are many great bankruptcy lawyers and many great trial lawyers, but few trial lawyers who routinely handle matters in bankruptcy court, or that require familiarity with bankruptcy rules and procedures. Our results speak for themselves. Let us investigate your potential claims at no cost to you.

Officer & Director Liability/Breach of Fiduciary Duty

Bankruptcies happen. But oftentimes, there is a reason that the debtor has landed in bankruptcy or that the debts have piled up so high. We have handled claims against directors and officers, and third parties, for negligence, breach of fiduciary duty and breach of duty of loyalty in bankruptcy courts, as well as federal district and state courts.

Such claims do not always arise in the context of bankruptcy or insolvency; however, the pre-bankruptcy acts and decisions of directors and officers then become the subject of scrutiny by a trustee or creditor once the corporation enters the bankruptcy arena.

We provide comprehensive and resourceful counsel regarding complex issues that arise under the unique circumstances of each case.

Our attorneys are well-versed in bankruptcy and corporate law and the firm has been authorized by bankruptcy courts to represent the interests of the bankruptcy estate and its creditors in connection with prosecuting such claims.

Fraudulent Transfers

Our bankruptcy litigation practice also includes pursuing large-scale cases of fraudulent or preferential transfers to maximize the value of the case. A bankruptcy fraudulent transfer occurs when a debtor conceals or transfers away property to avoid claims of executing creditors for purposes of bankruptcy.

The Uniform Fraudulent Transfer Act (UFTA) provides bankruptcy trustees and creditors with an objective test to determine whether a debtor has engaged in an illegal transfer of property or assets prior to filing for bankruptcy and, if fraudulent activity is discovered, with the powerful legal weapons needed to return those assets to the bankruptcy estate.

These cases are very complex and it’s important to use an attorney with experience in these matters. Paul LLP has considerable experience representing trustees and creditors in recovering property fraudulently transferred.

Recharacterization Claims

Traditionally, bankruptcy law honors the basic axiom that debt should be paid before equity. But when insiders structure the capitalization of a company as a debt transaction for their own benefit, the law in some instances permits looking beyond form to substance – namely, was the transaction truly a secured lending arrangement, or was it simply a disguised equity investment?

The remedy is most commonly invoked when an insider purports to loan money to a company when it is undercapitalized and the cash infusion should have taken the form of a capital contribution. Recharacterization in such a circumstance ensures that non-insider creditor claims will be paid first from the available assets of the corporation.

We have taken this claim to trial and prevailed.

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