Training Guide

Avoidance Actions


Training Guide

Avoidance Actions

Remote or in person

What’s Covered

  • Definition of an avoidance action, its purpose, and the parties
  • Preference actions
    • Requirements under the Bankruptcy Code
    • Lookback periods
    • Safe harbors and defenses
  • Fraudulent transfers and conveyances
    • Difference between active and constructive fraud
    • Requirements to show constructive fraud
    • Determining insolvency
    • State-law causes of action

Before the Session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

  • still frame from Preference Actions


    Avoidance Actions

    An overview of avoidance actions in a corporate restructuring, with a focus on preference actions and actual or constructive fraudulent transfers and conveyances.

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    Avoidance Actions


During the Session

Part 1: Knowledge Check

Ask attendees these questions to ensure they understand the topic:

  • What is the purpose of an avoidance action in Chapter 11?
  • Who are the typical parties in an avoidance action?
  • Under the Bankruptcy Code what is required to successfully bring a preference action?
  • What are some defenses against a preference action?
  • What are the requirements for showing fraudulent transfer or conveyance?
  • How is insolvency measured in a fraudulent transfer action? How is “unreasonably small capital” measured?
  • What are the differences between a state-law claim for fraudulent transfer or conveyance and an action under the bankruptcy code?
  • What types of transactions can’t be recouped or invalidated as preferences or fraudulent transfers or conveyances?

Part 2: Group Exercise

Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.

Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.

Part 3: War Stories and Firm Specifics

Share your own experiences and guidance, including:

  • Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
  • General practice tips (dos and don’ts)
  • Firm-specific guidance and practices

After the Session

To continue their learning, attendees can check out related courses in Hotshot’s Restructuring topic.

About Hotshot

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