Allegheny International Credit Corporation
Representation – Debois Investment Group
Bankruptcy – Western District of Pennsylvania
Situation: Bernstein and Bernstein, P.C. represented DeBois Investment Group in the bankruptcy of Allegheny International Credit Corporation (AICC) (a subsidiary of Allegheny International, Inc.). DeBois Investment Group purchased a substantial piece of real estate at a tax sale in 1986. AICC, holding the mortgage on the property, had a period of time during which it could redeem the property by paying the amount of the tax bid and costs.
Proper papers and payment by AICC did not reach the tax clerk until after the redemption expiration date. AICC claimed that since payment was in the mail the requirement was satisfied. Alternatively, it argued that the purchase at the tax sale constituted a fraudulent conveyance. Debois Investment Group retained Bernstein and Bernstein, P.C. to handle issues of bankruptcy court jurisdiction, Illinois tax law and general bankruptcy law.
Action: This was a unique case requiring extensive research and argument before the court. No court had previously decided the issue. The bankruptcy court ruled in favor of AICC on the fraudulent conveyance claim and DeBois Investment Group appealed the matter. On appeal to the District Court, the bankruptcy court’s decision was reversed and the case was remanded for further proceedings on the question of the timeliness of the redemption under Illinois state law. The matter was eventually settled in an amount much greater than that previously offered by AICC.