Recently, Jonathan Lipson spoke to Reuters and other media about the lawsuit brought against Blackstone LP by creditors of the bankrupt Extended Stay hotel chain.
The lawsuit, which at $8.4 billion ranks as one of the largest ever filed over a failed leveraged buyout, accuses Blackstone and other parties of benefiting at the expense of the hotel chain and its creditors, who suffered in the bankruptcy two years later.
It could also take its direction from a recent decision involving a restaurant in the New York City suburb of New Rochelle in which shareholders cited "settlement payment defense" to shield themselves from creditors.
Jonathan Lipson said that settlement payments defense has been enlisted to protect a far broader group than intended by lawmakers, who were trying to prevent the roiling of stock markets if a deal was voided in a fraudulent transfer case.
"Settlement payment doctrine was intended by Congress to perform a different function than people want to use it for today," said Lipson.
To read the original Reuters article, click here.
Submitted by UW Law News on June 28, 2011
This article appears in the categories: In the Media