As it continued to operate while insolvent, Global Hawk's deepening insolvency caused harm to its members as well as to Plaintiff acting as a liquidator on their behalf. See Pieciak v. Crowe LLP, 2022 WL 10010523, at *8 (D. Vt. Oct. 17, 2022) (surveying existing case law and concluding that "deepening insolvency is a viable theory of damages"). Plaintiff has established his fraud claim against Mr. Thandi and GCIB.
Although it predicted that the Vermont Supreme Court would agree with the Seventh Circuit that a liquidator or receiver's appointment “removes the wrongdoer from the scene” and thus the “sting” from the in pari delicto defense, the court held that “[b]ecause the in pari delicto defense is often fact-intensive and requires the weighing of the evidence, it cannot be resolved for purposes of the pending motion to dismiss other than to conclude that the doctrine may not be available in the facts and circumstances of this case.” Pieciak v. Crowe LLP, 2022 WL 10010523, at *9-10 (D. Vt. Oct. 17, 2022) (internal quotation marks omitted) (quoting Scholes v. Lehmann, 56 F.3d 750, 754 (7th Cir. 1995)).