Distressed Debt Alert: Distressed Claims Trading: Insider Trading May Lead to Disallowance of Bankruptcy Claims and Breach of Fiduciary Duties
1/9/2012
In a significant expansion of the potential risk for distressed claims traders, the Delaware bankruptcy court has recently ruled that traders who engage in insider trading may have their claims subordinated to equity, and that traders who amass claims sufficient to block a plan of reorganization owe fiduciary duties to all other creditors and shareholders during plan negotiations.
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