June 30, 2025
Client Alert: Bankruptcy Meets State Court: Lessons from a $4M Escrow Dispute
When bankruptcy courts and state courts vie for authority in complex financial disputes, the outcome can reshape recoveries for creditors, investors, and businesses. This tension was front and center in Silverman v. Rosenberg, et al. (Adv. Pro. No. 24-03734, Bankr. S.D.N.Y.), where a former Chapter 11 trustee’s bid to seize $4.4 million in escrow funds collided with a state court litigation. For private equity firms, hedge funds, and corporate leaders, this case offers insights into navigating these jurisdictional clashes and their impact on bankruptcy investments.