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Posts tagged "strong arm clause"

What Is the Strong-Arm Clause?

strong arm clause.jpgThe United States Bankruptcy Code includes a 'strong-arm clause' which gives a bankruptcy trustee or debtor in possession (DIP) important powers. Known as avoidance powers, they can give the trustee or DIP the authority to resist certain creditor claims. This most frequently occurs when a company enters into an agreement with a creditor immediately before the company enters bankruptcy. While those pre-bankruptcy agreements are still enforceable against the debtor company, they will need to be considered within the context of the claims of competing creditors.

  • Santa Clara County Bar Association | 1917
  • American Inns of Court
  • CWL | California Woman Lawyers
  • Bay Area Bankruptcy | Forun
  • The State Bar of California
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