In 2008, a U.S. bankruptcy trustee in Massachusetts accused Capital One of illegally trying 5, 600 times to collect debts already wiped out by a bankruptcy judge.
But a lawsuit filed in 2004 by a federal bankruptcy trustee in Alabama alleges that the joint venture kept no accounting records, had few assets, held no board meetings and routinely diverted sales to Terry and Cintas.
In a private action, filed in October 2003 in federal bankruptcy court in New York, the bankruptcy trustee for a business called Ticketplanet.com sought to recover money from Mandell and others, alleging they seized the firm's assets while avoiding its liabilities.
Citing the well-established principle that the trustee stood in the shoes of the debtor, the bankruptcy judge agreed with the victims, noting that the trustee had argued that the schemer had committed securities fraud under Alaska securities statutes.
Brian Leonard, the bankruptcy trustee overseeing the case in Minneapolis, says merely that he hasn't "reached any conclusions one way or another" regarding the allegations of fraudulent conveyance, and that it may be a "few months" before he takes any action.
In the Refco case, the Bankruptcy Trustee brought claims against more than one third-party advisor.
FORBES: FDIC Makes A Case Against Auditors For Bank Failures
The lawsuit is notable not because of any significant revelations but because it represents an escalation in the battle between Corzine and the bankruptcy trustee, former FBI director Louis Freeh.
The Bankruptcy Trustee filed an adversary action against Husband and Wife in 2009, against Husband individually and against both Husband and Wife as Trustees of the QPRT.
Authorities were only alerted to the alleged Madoff scheme in December, and it could be years before the bankruptcy trustee liquidating Madoff's investment business determines what individual investors will recover, and hence, (as the IRS sees it) what their deductible losses are.
But Frederick Grede, the trustee overseeing the bankruptcy of Sentinel Management Group, a futures broker that went bust in 2007, told Bloomberg that if MF Global is sued, it could take years for customers to get their money back.
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Those navigating skills caught the attention of Deirdre Martini, the U.S. Trustee--a Department of Justice affiliate that upholds the integrity of the bankruptcy process--in New York.
FORBES: As a businessman, he's been mixing with a sketchier crowd.
In the MF Global case, auditor PwC has been sued for its alleged negligence and breach of contract in not performing its duties by some Montana farmers and by customers acting on behalf of the bankruptcy trustee.
It is folly to believe that an offshore trust will protect domestic assets there is utterly no technical legal reason to believe that such will ever be the case, except in maybe the rarest of circumstances or against unsophisticated creditors (which will almost never include a Bankruptcy Trustee).
The four-page decision by U.S. District Judge Jed Rakoff in New York is a blow to the Mets owners, Saul Katz and Fred Wilpon, who have been in a prolonged legal battle for more than a year with Irving Picard, the court-appointed bankruptcy trustee seeking to find money for victims of Mr. Madoff's Ponzi scheme.
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