March 19, 2012
Canadian companies doing business in the United States should be aware that fraudulent transfers are a hot topic in American bankruptcy laws these days. The most recent development comes in Re Pitt Penn Holding Co. Inc., a case which a bankruptcy judge in Delaware ruled that the look-back period under Article 48 of the US Bankruptcy Code cannot be equitably tolled.
"Look-back refers to the fact that a trustee in bankruptcy can treat certain transfers of a debtor's property as fraudulent so long as they occurred no more than two years before the date of the bankruptcy filing," says Alison Bauer.
The issue arose in Pitt Penn when the insolvent debtor company, Industrial Enterprises of America Inc., sought to set aside certain transfers that occurred several months beyond the two-year period.
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