Quiz 30: Bankruptcy Law

Business

Go Quietly: In the case of In re TransTexas Gas Corp., 597 F.3d 298 (2010), the district court issued a judgment in favor of TransTexas for fraudulent transfers made to Stanley under an employment separation agreement. The Court of Appeals affirmed. By going quietly, Stanley asserted that he had information that was damaging to the company if he were not equitably compensated for his departure from employment. He qualified at the time of the payments as an insider.

a) Yes, Burke may file a voluntary petition for bankruptcy. Once she files her petition for bankruptcy, it is considered a voluntary bankruptcy. b) O and S can force B into involuntary bankruptcy by petition if they meet the following requirements: If B, the debtor, has 12 or more creditors, then at least three creditors must have claims totaling at least $14,425. If B has less than 12 creditors, then at least one creditor must have a claim totaling $14, 425 or more. In this case, B only has eight creditors, but since both O and S's claims are well above the $14,425 benchmark, they can force her into involuntary bankruptcy.

Insider Status: In the case of In re TransTexas Gas Corp., 597 F.3d 298 (2010), the district court issued a judgment in favor of TransTexas for fraudulent transfers made to Stanley under an employment separation agreement. The Court of Appeals affirmed. The court determined that Stanley received the benefit of monies transferred to him as the benefit of being an insider. He had incurred such obligation for the benefit of being an insider under an employment contract and not in the ordinary course of business.

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