Claim Purchasers Beware

Summer 2013Articles NABTalk

Purchasers of assets from a bankruptcy estate enjoy the benefit of knowing that the assets acquired are free and clear of liens, claims and encumbrances. However, purchasers of claims against a bankruptcy estate may not enjoy the same advantage. Courts have issued conflicting opinions on the question of whether claims against the estate purchased by third parties are free of claims by the bankruptcy trustee for avoidance actions or equitable subordination.

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First published in NABTalk, the Journal of the National Association of Bankruptcy Trustees, Summer 2013, Volume 29, Issue 2, pp 30-31,and 35.