In 2007, I represented Grant Thornton in its challenge of a deepening insolvency claim in Minnesota. The decision by the Minnesota Court of Appeals in the case--Julia A. Christians, Trustee for the Bankruptcy Estate of Technimar Industries Inc. v. Grant Thornton LLP--could provide useful lessons for accounting firms.
Technimar planned to manufacture a product used, among other things, to make kitchen countertops. The company required an expensive piece of equipment for the manufacturing process. To get the money needed to fuel the operation, Technimar entered into a series of complex financial arrangements, the final piece of which was a bond offering.
During the bond ...