- videocam On-Demand
- signal_cellular_alt Intermediate
- card_travel Bankruptcy
- schedule 90 minutes
The In Pari Delicto Defense to Bankruptcy and Other Claims Against Directors, Officers, and Third Parties
Anticipating or Raising the Defense in Bankruptcy and Other Asset Recovery Litigation
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Description
When a debtor's fraud or misconduct has led to insolvency and/or bankruptcy, those charged with recovering assets for the estate often sue the debtor's management, lenders, or professionals who were involved in or facilitated the company's misdeeds. A significant defense in such cases is the equitable doctrine of in pari delicto ("of equal fault"), which provides that courts will not help plaintiffs profit from their wrongdoings. Similarly, the Wagoner rule deprives trustees standing to sue those who assisted the debtor corporation in fraud.
This defense has been rapidly evolving in the past few years, and its scope varies by jurisdiction. It was recently applied in Kelley v. BMO Harris Bank Nat’l Ass’n, 2024 WL 4158179 (8th Cir. Sept. 12, 2024), but had gained traction through the Madoff and MF Global litigation.
Nonetheless, exceptions to in pari delicto do exist, such as the non-statutory insider exception and the adverse interest exception. There are even exceptions to the exceptions.
Listen as our authoritative panel offers updates on asset recovery litigation against a debtor's officers, directors, outside professionals, and lenders; on the in pari delicto and related defenses; and on recent trends and developments.
Presented By

Mr. Alexander, a managing associate in the firm’s Business Restructuring, Creditors’ Rights & Bankruptcy practice, focuses on bankruptcy matters, including representing creditors in insolvency proceedings. His experience includes representing community banks, real estate developers and utility companies in bankruptcy and other collection-related matters.

Mr. Blansky's practice focuses on commercial and bankruptcy litigation. He frequently prosecutes avoidance claims on behalf of bankruptcy trustees, assignees for the benefit of creditors, and other plaintiffs. He is admitted to practice in the District and Bankruptcy Courts of the Southern and Middle Districts of Florida and Eastern and Southern Districts of New York, and in the Courts of the States of Florida and New York. Mr. Blansky is a frequent speaker on the subject of avoidance litigation. He previously presented for Strafford on Preference Actions: Clarifying the Trustee's Pre-Filing Due Diligence. He is also a Supreme Court of Florida Qualified Arbitrator and writes a topical legal blog, A Lawyer in Florida.

Mr. Silver is a shareholder at Nason Yeager with over 40 years of experience in business bankruptcy and creditors’ rights. He also has extensive experience in commercial litigation and receivership, as well as creditors’ rights litigation arising out of Ponzi and other fraudulent schemes. Mr. Silver is rated AV Preeminent by Martindale-Hubbell since 1992, which indicates a demonstration of the highest professional and ethical standards and is the highest rating a lawyer can receive. He graduated in the top 3% of his law school class and served as the Associate Research Editor of the University of Miami Law Review.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Live Online
On Demand
Date + Time
- event
Tuesday, March 18, 2025
- schedule
1:00 p.m. ET./10:00 a.m. PT
Outline
- Common claims against D&Os and outside professionals, as well as claims against banks and other allegedly complicit third-party non-professionals
- Fraud
- Aiding and abetting fraud and breach of fiduciary duties
- Malpractice
- Fraudulent conveyance
- Applicability and scope of the in pari delicto defense
- Standing to pursue claims
- Exceptions to the doctrine
- Which states' laws apply
- Special state law considerations
- Recent case law developments
Benefits
The panel will review these and other critical issues:
- What are the trends in asset recovery litigation in which the in pari delicto defense may apply, and what are the conventional theories of liability?
- Is the in pari delicto defense or an asserted lack of standing a problematic obstacle to filing suit against professionals and professional firms who represented the distressed or insolvent company, or against banks and other third-party non-professionals alleged to have been complicit in the wrongdoing?
- What are some of the best arguments for and against the application of the defense?
- What are the most recent developments in case law?
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