Morgan Lewis on Restructuring, Winter 2007

In this Issue:

• Going, Going, Almost Gone: Deepening Insolvency - A Disappearing Theory of Liability, Part II:
  Over the past year, courts have generally dismissed deepening insolvency claims for failure to state a claim or as redundant of other claims.
• Reprise: Diversity Jurisdiction and National Banks:
  In our Spring 2005 newsletter, we reported on the decision by the Supreme Court in Wachovia Bank v. Schmidt, which held a national bank to be a citizen of the state in which its main office, as set forth in its articles of association, is located. In that case, for determining diversity jurisdiction, the Fourth Circuit held that, as a national association, Wachovia would be deemed “located” in (i.e., a citizen of) every state in which it maintained a branch office.
• Recharacterization: Sleeping Parents Beware:
  This article presents one obvious, albeit not often utilized, solution: parent corporations should collect debts due and owing from their subsidiaries to avoid the possibility of being relegated to the unenviable position of an equity investor in the event of a bankruptcy proceeding.
• Supplement: Recent Noteworthy Decisions

For the full story, please view the PDF.