What is the clawback of the Bankruptcy Act? ...

The clawback provision bankruptcy law allows the trustee to revoke or cancel certain types of transactions. ... .In other words, if a debtor can, in certain processes of transfer of property that is otherwise involved in bankruptcy for others to use, the Trustee, under certain circumstances "recovery" or to recover such assets. ... .esther type are two situations in which the claw is used in case of bankruptcy. ... .Recovery is in relation to fraudulent use and preferential agreements transfers.Fraudulent transfer recovery is for the return of assets to avoid the transfer of the debtor fraudulently, case.Preferential including the insolvency of the debtor in bankruptcy must treat all transfers. And creditors. ... .If, before the bankruptcy will (usually within 120 to 180 days), the debtor pays the creditor select the trustee in bankruptcy to recover the preferred payment.BenefitsThe main benefit associated with recovery is that goods are otherwise. not available from the improper transfers. .The debtor is part of the bankruptcy for potential distribution to all creditors.Famous TiesBernie Madoff, the center of the largest Ponzi scheme in history is to be made bankrupt. (Federal and prisons). ... .The trustee used the theory of recovery, seek the return of certain assets and funds to other Madoff ....