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Article: Legal Notes
- Article from:
- The Secured Lender
- Article date:
- May 1, 2005
- Author:
CopyrightCopyright Commercial Finance Association May/Jun 2005. Provided by ProQuest LLC. (Hide copyright information)
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In re Global Service Group, LLC, 316B.R. 451 (Bankr. S.D.N.Y. 2004) (Senior secured lender not liable under "deepening insolvency" theory.)
A recent New York bankruptcy decision provides comfort for secured lenders who may be the subject of attacks under the evolving doctrine of "deepening insolvency." The facts, which were taken to be true for purposes of the motions to dismiss that were before the court, were as follows:
Global Service Group, LLC was a New York limited liability company in the business of refinishing marble, metal and wood. Atlantic Bank was Global's lender and held a security interest in all of Global's assets. The complaint alleges that Global was insolvent, or "in the ...