Client Alert: Moral Bankruptcy: From Fiduciary to Fraud

With corporate bankruptcies on track to reach a decade-high in this bumpy and unpredictable market, it is imperative that companies are aware of the many applicable regulations, rules, and statutes in play as well as the risks and opportunities facing creditors, debtors, and other key stakeholders during bankruptcy and restructuring. The U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission’s (“SEC”) recent enforcement actions against hedge fund founder and former bankruptcy attorney Daniel Kamensky, for securities fraud in connection with the alleged breach of his fiduciary duties to unsecured creditors in the Neiman Marcus bankruptcy, demonstrate the importance of an inter-disciplinary approach to representation in bankruptcy proceedings and government investigations. Having a well-rounded legal bench is critical to forming and executing a strategy that can aid parties in seeing around the corner to the various risks and opportunities that may lay ahead.