US insolvency actions could have UK reach
English judges pave the way for US insolvency proceedings to seek direct support from UK courts in clawing back cash
Insolvency handlers in the US may be able to lobby English courts for help in
clawing back assets held in the UK, despite administration proceedings not being
active here.
In a recent case, the Court of Appeal ruled that a trust created by
Eurofinance SA could recognise overseas insolvency actions enforced by US
courts,
the
FT reported.
The ruling could also have an impact on high-profile cases such as Lehman
Brothers and Bernard Madoff’s companies.
In the case of Lehman Brothers, the US trustees could ask for assistance from
UK courts in effecting bankruptcy judgments, while Madoff’s UK victims could
find themselves the target of clawbacks.
US trustees could seek to recoup cash from UK victims who may have been
overpaid from Madoff’s asset pool.
Further reading:
KPMG
win Madoff negligence case
