CLAWBACK DEFENSES

This defense will only be of material value if it relates to recovery of the principal investment, not as to the false profits. In the case of In re Bayou Group, LLC, 362. B.R. 624 (Bankr. S.D.N.Y. 2007), the court went to great lengths analyzing the good faith defense as it applied to the ability of the Bankruptcy Trustee to recover the principal, in addition to any false profits. To view copy of this important ruling click here.

For further information on defending the recovery of False Profits or other defenses for clawback litigation click here.

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