Twenty years ago, we saw a lot of what one of my former senior partners called "Alaska bankruptcies," in which the debtor simply closed the doors to his or her business, gathered up any remaining assets and essentially dropped out of sight, never to be seen or heard from again.

Sometimes debtors in that circumstance actually filed formal bankruptcy petitions in the Bankruptcy Court for the District of Alaska. In some of that type of case, few if any bankruptcy schedules were filed (notwithstanding the earnest efforts of debtors' counsel) and ultimately the Bankruptcy Court dismissed the cases. However, the debtor was still never to be seen or heard from again.

Over the years, we have also observed a good number of legally improper, but nonetheless creative schemes and methodologies undertaken by some debtors to attempt to avoid paying their debts. Outright fraudulent conveyances, or conveyances of assets with intent to hinder, delay or defraud creditors continue to occur and can be set aside as a matter of state law or by a bankruptcy trustee.

There are also variations on fraudulent conveyance activities. An example is where a corporate debtor ceases doing business, leaves creditors unpaid, but the same principals of that corporation form another one and essentially operate the same business under another name.

Another variation on the old style "Alaska bankruptcy" occurs where the debtor chooses to stay in Alaska, but is constantly on the move, sometimes working in Bush Alaska, but generally keeping out of touch, and sometimes quite successfully, with his or her creditors.

Alaska law and the Alaska economy have matured and become more sophisticated in the past 20 years. Alaska courts and state and federal law enforcement authorities in Alaska have become more strict in enforcing both civil and criminal laws in the creditor/debtor arena. In addition, more sophisticated "skip tracing" services as well as the Internet have made it more difficult for debtors to simply vanish.

The courts have also played a role in stricter accountability. In 1993, the Alaska Supreme Court issued its decision in Summers vs. Hagen in which the court ruled that the recipient of a fraudulent conveyance could be liable for damages to a creditor of the debtor based on that person's participation in a conspiracy to commit a fraudulent conveyance.

Thus, being a participant in a fraudulent conveyance scheme or activity in Alaska exposes the recipient of the property to liability arguably even if he or she no longer retains the property received. The liability is not limited to returning the property. As a result, the rule in Summers vs. Hagen can be used by creditors to vigorously pursue the personal assets of third parties in circumstances involving fraudulent debtor conduct.

In the criminal arena, Alaska governmental lawyers are also more rigorously scrutinizing apparently improper business transactions. In the case of bankruptcy proceedings, the administration of bankruptcy cases is now watched over by the Office of the U.S. Trustee, which is a part of the federal Department of Justice here in the District of Alaska and elsewhere.

The U.S. Trustee's office is charged with seeing that bankruptcy cases proceed in a timely way and in accordance with the Bankruptcy Code and rules. The U.S. Trustee also oversees the actions of the various bankruptcy panel trustees and provides input and guidance to them with regard to pursuing fraudulent conveyances by debtors in bankruptcy.

The Office of the U.S. Trustee also makes referrals to the prosecutors of the Office of the United States Attorney in cases of suspected bankruptcy fraud. In the past year or so, at least two cases that were referred to the United States Attorney resulted in prosecutions, convictions and sentencing. One case principally involved a debtor lying under oath in written and oral statements in bankruptcy court proceedings. Another case involved concealing or a failure to disclose the existence of assets.

Outside of the bankruptcy arena, the Alaska U.S. Attorney's Office has in recent years prosecuted as a matter of "white collar crime" actions involving criminal bank fraud in which the defendant knowingly executes or attempts to execute a scheme or artifice to defraud a financial institution.

In that regard, the U.S. Attorney's Office in 2001 did prosecute the principal in a corporate recreational vehicle dealership in Anchorage for bank fraud and obtained a conviction at the trial court level.

Serious financial difficulties are generally very stressful and trying for all concerned, including the debtor, his or her family, creditors and various parties otherwise affected. Both Alaska and federal law are tending to become more strict in terms of protection of creditors' rights and courts are paying attention to those enhanced creditor rights and remedies.

Nevertheless, while old time "Alaska bankruptcies" are probably becoming a thing of the past, Alaska state and federal law still provides significant protections to a honest debtor who acts in good faith and performs his or her obligations to the best of his or her abilities.

Frederick J. Odsen is a member of the law firm of Hughes Thorsness Powell Huddleston & Bauman LLC.