The Adelphia Creditors Committee filed an adversary proceeding against approximately 380 defendants, including bank lenders, investment banks and their agents, alleging wrongdoing in the defendants' dealings with Adelphia's former management who looted the company. The complaint asserted numerous claims for relief in connection with borrowing facilities under which Adelphia became liable to repay the banks for billions of dollars that went to the insiders.
In refusing to grant defendants' motion to dismiss the complaint, the court rejected in pari delicto and other defenses. Adelphia Communications Corp. v. Bank of America, et al. 365 B.R. 24 (Bankr. S.D.N.Y., June 11, 2007). The discussion below summarizes rulings by the court that are of particular significance.
Aiding And Abetting
One of the key rulings the court made in the Adelphia case is that a claim for aiding and abetting breach of fiduciary duty is actionable in Pennsylvania.
Applying New York choice of law principles...
