Three members of Arent Fox 's bankruptcy practice – partner Robert Hirsh, along with associate Heike Vogel – have been published in the latest edition of Credit and Financial Management Review, the official publication of the Credit Research Foundation.

Their article, “Claims Trading in the Wake of the District Court's decision in Enron; Should You Feel Safe Selling Your Claims?,” provides an in-depth analysis of an August 2007 decision by the US District Court for the Southern District of New York that overturned a federal bankruptcy court's highly-controversial decision in the Enron case, which had held that liabilities of equitable subordination and preference actions attach to the transferee when claims are being transferred even if the transferor (not the transferee) engaged in the alleged inequitable contact or received the preferential payments.

The Southern District's decision has significant implications for all those who sell or consider selling their bankruptcy claims, as well as credit insurers. The article focuses on the effects upon sellers, particularly allocation of risks, continuing risks, claw back provisions in sale documents, the pitfalls and potential safe harbor protection created by this decision, as well as whether claim sellers can gain the benefit of this safe harbor.

To read the complete article, please click here.

Reprinted with permission of Credit and Financial Management Review and the Credit Research Foundation (www.crfonline.org)