The advancement of fraudulent conveyance claims against a defendant class of disinterested public minority shareholders who neither negotiated nor structured a going private transaction presents issues of first impression in our District and Circuit Courts and is being watched carefully by industry professionals.Įntwistle & Cappucci, together with members of the Defense Committee, filed initial Phase One Motions to Dismiss certain of the claims and on September 23, 2013, presiding Judge Richard Sullivan issued an order dismissing the Noteholders’ state law constructive fraudulent conveyance claims on grounds that Section 362(a)(1) of the Bankruptcy Code stays fraudulent conveyance claims by creditors for as long as the trustee is exercising its avoidance powers. Entwistle & Cappucci serves as court-appointed co-liaison counsel and member of the Defense Committee for a class consisting of approximately 5,500 former shareholders of Tribune Company named as defendants in a series of cases countrywide (since consolidated into an MDL in S.D.N.Y.) brought by noteholders of the Tribune Company who financed the company’s 2007 LBO (the “Noteholders”) and by a Trustee representing the former unsecured creditors committee (the “Trustee”) seeking to avoid approximately $8 billion in transfers to the Tribune Company’s public shareholders who tendered shares in the LBO.
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