NEW YORK, September 5, 2023 – Leading international law firm Proskauer prevailed at the Eighth Circuit on behalf of its client, ARKK Food Company (“ARKK”), a food products supplier, on an important question of first impression at the circuit-level in bankruptcy – whether avoidance actions constitute “property of the estate” that can be sold by the trustee.
The U.S. Court of Appeals for the Eighth Circuit held earlier this week that avoidance actions are property of the estate and affirmed the bankruptcy court’s order approving the sale and finding it in the best interests of the estate.
Proskauer handled all aspects of the appeal, including the briefing and oral argument. As part of its support for ARKK, Proskauer pioneered a strategy whereby the client exchanged its claim for 85% ownership of the estate’s estimated $100+ million in avoidance actions, drastically increasing ARKK’s prospective recovery. This strategy catapulted ARKK’s position from a creditor originally holding a $7 million claim against an insolvent entity to owning more than an estimated $100 million in claims against numerous non-debtor entities.
The Proskauer team was led by partner Todd Ohlms (Litigation) and associate Daniel Desatnik (Bankruptcy) and included partner John Roberts and associate Shiloh Rainwater (Appellate); partner Ehud Barak and associate Max Greenberg (Bankruptcy); and senior counsel Jordan Leader and associate Javier Sosa (Litigation).
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