Third Circuit Rules that Parties Cannot Contract Around the Mutuality Requirement for Setoff in Bankruptcy
By EsqSocial Corporation 14/05/21
On March 19, in a matter of first impression, the Third Circuit Court of Appeals (Court) held that triangular setoff is not permissible in bankruptcy due to Bankruptcy Code Section 553(a)’s mutuality requirement, and that parties cannot evade that requirement by contracting around it. See In re Orexigen Therapeutics, Inc., 990 F.3d 748 (3d Cir. 2021)....
By: Troutman Pepper