Commercial Fraud Task Force Committee

ABI Committee News

New Committee Co-Chairs and Leadership Positions Announced

ABI is pleased to announce your 2008-2009 co-chairs, as well as the addition of five new leadership positions. These new positions are a result of your feedback regarding opportunities for involvement and advancement in the association. 

Co-Chairs: Francis A. Monaco
                Sheryl L. Toby

Education Director: Jason S. Brookner

Listserve Moderator: Randall Lee Barrett

Membership Relations Director: Bruce Weiner

Newsletter Editor: Jack Seward

Special Projects/Task Force Leader: David P. Leibowitz

Click here for the contact information on your committee leadership positions.


Is “Springfield” A Mine Field

Recently, in In re Enron Corp., et al., v. Springfield Associates, L.L.C. et al.,(In re Enron) 2007 WL 2446498 (S.D.N.Y.), (Springfield) the U.S. District Court for the Southern District of New York differentiated between traded claims, which can be the subject of equitable subordination actions, under 11 U.S.C. §510(c) and disallowance, pursuant to 11 U.S.C. §502(d) and those that cannot. Springfield obviously impacts on claims trading in bankruptcy cases. However, as the “subprime mess” is unscrambled, Springfield may affect the balance sheets of those attempting to profit from or ameliorate the condition caused by failing subprime lenders.

Read the full article.


Recovering Home Owners Deposits in Chapter 11

This article will discuss, in two parts, how real estate developers of projects large and small are experiencing an industry-wide slowdown as mortgage money dries up and construction loans default, and its ramifications on homeowner deposits in chapter 11 cases.

A couple in late middle age asked to speak directly to the bankruptcy judge during a hearing to approve the sale by auction of a retirement home they had under contract. The home was in a large housing project. Construction halted when the debtor ran out of money in the spring. Subsequently, this chapter 11 case and 11 others were filed. The wife told the court about the impact of this business’ failure on their future life together.

Read the full article.


Collusion In Bankruptcy Sales Part IV – Factors To Consider When Bringing An Action Under Section 363(N)

This is the final article in a four-part series discussing collusion in bankruptcy sales. Part I discussed the prohibition of collusion in bankruptcy sales under §363(n) of the Bankruptcy Code. Part II discussed the difference between permissible collaboration and impermissible collusion. Part III explored the fine line between agreements that control a sales price at an auction versus agreements that only affect the sales price. Generally, parts I through III discussed the issue of collusion in bankruptcy in the context of how to avoid liability under Bankruptcy Code §363(n). Part IV will discuss the other side of the coin, i.e., how a §363(n) plaintiff (usually a losing party at an auction) should structure its case to maximize the chances that colluding parties are held liable.

Read the full article.


Shine the Light: The Use of Examiners to Uncover Fraud in Chapter 11 Cases

The Appointment of an Examiner

Given the highly charged atmosphere in today’s financial world and the perceived corporate fraud epidemic, there is every reason to believe that the use of examiners in chapter 11 cases will continue to increase. Practitioners will need to be knowledgeable regarding the scope, parameters and limits of an examiner.

11 U.S.C. §1104(c)(1) provides for the appointment of an examiner as a “lesser included remedy” short of the appointment of a chapter 11 trustee. Section 1104 provides for the appointment of the examiner “for cause” when the moving party has made a showing that such appointment is in the interests of creditors, equity security-holders and the estate. Section 1104(c)(2), however, makes appointment of a trustee mandatory, upon motion by a party in interest, if “the debtor’s fixed, liquidated, unsecured debts, other than debts for goods, services or taxes, or owing to an insider, exceed $5,000,000.”

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The Anti-Social Aspects Of Tracing

There’s a chap who sits at the end of the bar in my favorite pub, just around the corner from my brother’s Thames-side flat in London, who knows everything. He’s the sort who wears a tweed cap, a wool tie and cavalry twill trousers (pants to you) and can go on at length on the merits of standard SU carburetors versus the Webber 45DCOE on a 1965 MGB, discuss the winning goal and name the members of the Uruguay team when they won the soccer World Cup in 1930, and will give you precisely the reasons for the failure and sale of Beas Stearns. Irritatingly, I have never known him to be wrong, but he is incredibly dull and I avoid him like the plague. However, like the plague, he can still catch up with you despite your best efforts.

Read the full article.


Committee News

You have just received the 5th Newsletter for 2008.

Please consider writing an article for the Commercial Fraud Task Force Committee Newsletter. Basic publishing requirements: articles are due the beginning of the last week of the month before the month of publishing and should be about 500-2,500 words (longer is fine when done as Part I, II, etc). Do you need some suggested topics, or do you have a few topics you would like to see in future issues of our Newsletter? Please contact the Newsletter Editor Jack Seward at