Definition of a Nominal Defendant Bankruptcy
A nominal defendant is a defendant involved in a lawsuit because of a technical connection to a bankruptcy. A nominal defendant has no fault or rights to recovery in a lawsuit.
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Definition
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A nominal defendant, also called a relief defendant, is a supposedly innocent third party. This defendant is someone who is described as having no interest in the litigation subject--the subject of bankruptcy.
Example
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An example of a nominal defendant is a person who received money from another person and accepted it. The person did not know however, that the money she received was obtained from the giver illegally. The giver of the property probably gave the money to avoid being caught with it. The receiver of the money is called the nominal defendant.
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Effects
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In this type of case, a nominal defendant is either an innocent party or is involved. It is up to the court system to determine this. As of 2010, the recovery of illegal property and money from a nominal defendant is complicated and the courts are still working on legal remedies for this matter.
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References
- US Legal: Nominal Defendant Law & Legal Definition
- Mondaq: United States: D&O Policies in Bankruptcy - Delaware Bankruptcy Court Rules that Directors and Officers May Access Eroding Policy Notwithstanding Company's Bankruptcy Filing
- ABI World: Defrauded Parties' Recovery of Funds from Innocent Third Parties: The Relief Defendant
