Publications
Ninth Circuit Affirms Mandatory Subordination of Investor’s Securities Claim in Individual Debtor’s Reorganization Case
Pratt's Journal of Bankruptcy Law
November/December 2016
“[T]he claims of [an individual debtor’s] general unsecured creditors are ‘senior to or equal [to]’” a defrauded investor’s security claim under Bankruptcy Code (the “Code”) § 510(b), held the U.S. Court of Appeals for the Ninth Circuit recently in In re Del Biaggio. The investor (“F”) had filed a claim against the debtor based on his wrongful failure to fund, through his affiliated limited liability company (“LLC”), his share in an acquisition venture with F. The Ninth Circuit affirmed the lower courts’ effective “superimpos[ing]” of the “capital structure [of the debtor’s affiliate] … on the debtor to determine the correct level of priority.” In this article, of counsel Michael Cook discusses the Ninth Circuit’s decision affirming the subordination of an investor’s securities claims.
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The US Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) have overhauled Form PF and private fund managers have until March 12, 2025, to begin reporting on the new Form. The changes to the reporting requirements mandated by the amendments to the Form (“Form PF Amendments”) will require substantial preparation by many managers.[1]
Alerts
On March 1, 2024, New York Governor Kathy Hochul signed into law an amended version of the New York LLC Transparency Act (“NYLTA”),[1] requiring certain limited liability companies (“LLCs”) formed or authorized to do business in New York (each, a “NY Reporting Company”) to file a beneficial ownership information (“BOI”) report with the NY Department of State (“NY DOS”). Each NY Reporting Company will be required to disclose on its BOI report identifying information pertaining to each individual who directly or indirectly exercises substantial control or owns or controls 25 percent or more of the ownership interests of a NY Reporting Company (each, a “Beneficial Owner”) and the individuals involved in the NY Reporting Company’s formation or registration to do business in New York (each, an “Applicant”). Information reported to NY DOS will be maintained in a private database not accessible to the public. The NYLTA goes into effect on Jan. 1, 2026 and requires the NY DOS to promulgate regulations implementing the legislation.
Alerts
The US Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) have overhauled Form PF and private fund managers have until March 12, 2025, to begin reporting on the new Form. The changes to the reporting requirements mandated by the amendments to the Form (“Form PF Amendments”) will require substantial preparation by many managers.[1]