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Second Circuit Affirms Dismissal of Stillwater Adversary Proceeding

Fri 11 October 2019 News Releases

Brian J. Grieco, a bankruptcy litigation attorney with McLaughlin & Stern, won a major victory in the United States Court of Appeals for the Second Circuit. On September 16, 2019, the Second Circuit affirmed the dismissal of all claims by Stillwater Liquidating LLC against multiple McLaughlin & Stern clients. This case goes back to 2014 when the post-bankruptcy liquidating trust for Stillwater Asset Backed Offshore Fund Ltd. filed a $50 million adversary proceeding in the United States Bankruptcy Court for the Southern District of New York. The liquidating trust brought claims for fraudulent conveyance, unjust enrichment, and conspiracy to defraud and convert property, accusing the defendants of engaging in a fraudulent scheme to strip entities related to the alleged Stillwater/Gerova Ponzi scheme of approximately $540 million in assets. Mr. Grieco, who was instrumental in obtaining dismissal of these claims in the Bankruptcy Court and handled the original appeal to the District Court, successfully argued the appeal in the Second Circuit.

McLaughlin & Stern handles a broad range of bankruptcy-related litigation, such as both federal and state fraudulent conveyance litigation.