On May 4, 2012, Bankruptcy Judge Kevin J. Carey of the US Bankruptcy Court for the District of Delaware disallowed certain trade claims purchased on the secondary market because the sellers of those claims had not repaid their preference liability. The court's interpretation of Section 502(d) of the Bankruptcy Code in the KB Toys case rejects the analysis of the US District Court for the Southern District of New York's 2007 ruling in Enron.
"Purchaser of Trade Claims Takes Subject to Disallowance Based on Sellers' Failure to Repay Preference Liability, " WilmerHale Client Newsletter
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