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Third Circuit Requires Plaintiffs to Prove Causal Link and Breach of Duty in Deepening Insolvency Cases

01/20/2010

Earlier this month in Marion v. TDI, Inc., the Court of Appeals for the Third Circuit overturned a $32.7 million jury verdict against defendants accused of deepening the insolvency of Bentley Financial Services (“BFS”) by giving it access to more cash and investors. The suit was brought by the receiver for BFS, a Pennsylvania corporation, after BFS’s chief officer used the corporation to run a Ponzi scheme for five years, defrauding more than 200 investors and causing $375 million in losses. The receiver claimed that the defendants, together with BFS’s chief officer, had harmed the corporation by saddling it with additional liability to victims of the scheme.

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