The New York Law Journal Publishes Article by Ethan Wohl on Court of Appeals Decision Concerning the In Pari Delicto Doctrine

June 1, 2011

The New York Law Journal recently published an article by one of our partners, Ethan Wohl, concerning the 4-3 decision of the New York Court of Appeals in Kirschner v. KPMG LLP holding that the in pari delicto doctrine -- the principle that courts will not intercede to resolve a dispute between wrongdoers -- applies broadly to bar claims by a company against third parties who assist corporate insiders in wrongdoing, even if the outsiders knowingly participate in the fraud or other breach of duty, profit from it, and are integral to its success.

The article concludes that the decision (which declined to follow recent rulings by the New Jersey and Pennsylvania high courts adopting less expansive versions of the doctrine) presents a major impediment to recovery for bankruptcy trustees, derivative plaintiffs and successor corporate managers who seek to impose liability on third parties for losses in which insiders are also at fault.

Use the link in the right sidebar to download a copy of the article.