Debtors in or near bankruptcy often attract claims of fraudulent conveyance related to sales or transfers of assets, sometimes years in the past. These claims, brought against the transferees and, occasionally, officers and directors, may seek return of assets, monetary damages or a declaration that the transferee is the successor to the debtor's liabilities. A declaration of successor liability where the debtor is a defendant in asbestos or other mass tort litigation can be devastating, or even fatal, to the business of a transferee.
Our lawyers have defended clients in many cases alleging fraudulent conveyance. This includes a recent landmark decision demonstrating that a company facing significant liabilities can divest assets, and a third party can purchase them, without running afoul of fraudulent conveyance laws -- even if the transaction is between related companies and designed specifically to manage the liabilities -- as long as the creditors aren't "injured" by the transaction.