Bankruptcy Transferring Control to Parent Was Filed in Good Faith

Chair emeritus and finance and restructuring partner Andrew Kassner and counsel Joseph Argentina coauthored an article for The Legal Intelligencer titled “Bankruptcy Transferring Control to Parent Was Filed in Good Faith,” which discusses whether targeted bankruptcy filings involving affiliates of larger companies are for legitimate bankruptcy purposes. This issue was recently considered in a case by the U.S. Bankruptcy Court for the District of Delaware.

Kassner and Argentina outline the debtor’s obligations to insiders and why the filing was justified and had a proper purpose. The authors note that there is no statutory definition of “good faith” in the bankruptcy code and that courts are flexible when considering the circumstances of a bankruptcy filing.