News & Analysis as of

Motion to Dismiss Fraudulent Transfers

King & Spalding

Trustee’s Fraudulent Transfer Claims Survive Motion to Dismiss in Connection with Bernie Madoff Ponzi Scheme

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On March 14, 2024, the U.S. District Court for the Southern District of New York denied a motion by Citibank, N.A. for leave to file an interlocutory appeal of a bankruptcy court’s order denying a motion to dismiss fraudulent...more

Bracewell LLP

546(e)’s Not-So-Safe Harbor: Second Influential Judge Echoes Concerns that Broad Exemption Shelters Pirates

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Delaware Judge Brendan Shannon has joined calls for reforming Section 546(e) of the bankruptcy code, echoing concerns that the section’s safe harbor from fraudulent transfer liability has allowed investors to “loot privately...more

King & Spalding

Fraudulent Transfer Claims Against Investors Survive Motions to Dismiss

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On October 12, 2022, the U.S. Bankruptcy Court for the Southern District of New York denied motions to dismiss fraudulent transfer claims asserted against certain investors in Tops Holding II Corporation. In 2007, a group of...more

Morris James LLP

Chancery Dismisses Claims Seeking to Unwind Secondary Transactions that Allegedly Jeopardized Recovery for Primary Fraudulent...

Morris James LLP on

Burkhart v. Genworth Fin., Inc., C.A. No. 2018-0691-JRS (Del. Ch. May 10, 2022) - The plaintiffs were a putative class of policyholders and insurance agents with an interest in long-term care insurance policies written by...more

Nelson Mullins Riley & Scarborough LLP

Bankruptcy Court Narrowly Construes Section 546(e) Safe Harbor

On August 18, 2022, the United States Bankruptcy Court for the Southern District of Indiana, in In re BWGS, LLC, No. 19-01487-JMC-7A, 2022 WL 3568045 (Bankr. S.D. Ind. Aug. 18, 2022), narrowly interpreted the safe harbor...more

Kelley Drye & Warren LLP

If the Shoe Fits . . . . Defendants in Nine West D&O Litigation Fail to Convince Judge to Dismiss Claims for Breach of Fiduciary...

A recent decision by Judge Jed Rakoff of the Southern District of New York highlights the risks faced by directors and officers of companies in financial distress who fail to undertake properly their duties to the company and...more

Kramer Levin Naftalis & Frankel LLP

Delaware Bankruptcy Court Declines To Dismiss Fraudulent Transfer Suit Filed Seven Years After Challenged Transaction Occurred

In UMB Bank NA v. Sun Capital Partners V, LP (In re LSC Wind Down, LLC), Adv. Proc. No 19-50272 (Bankr. D. Del. Jan. 23, 2020), the Bankruptcy Court for the District of Delaware denied a motion to dismiss a liquidating...more

Womble Bond Dickinson

Trustee Survives Judgment in Fraudulent-Conveyance Action Based on Novation Argument

Womble Bond Dickinson on

The Sixth Circuit recently ruled that a trustee’s claim that a novation occurred upon the execution of amended and restated loan documents could not be dismissed under a Rule 12 (b)(6) motion. The Sixth Circuit remanded the...more

Nelson Mullins Riley & Scarborough LLP

Specific Personal Jurisdiction Exists over a Foreign Transferee in a Fraudulent Transfer Action

The United States Bankruptcy Court for the Northern District of California recently held that a resident of Hong Kong who purchased goods over the internet from a company in California was subject to personal jurisdiction in...more

Dechert LLP

Restructuring and Insolvency Bulletin: Issue 4 - May 2018: If You Don’t Succeed in Anguilla, Should You Try Again in the US?

Dechert LLP on

Two United States Bankruptcy Judges for the Southern District of New York recently issued a joint opinion addressing common issues raised by motions to dismiss in two separate adversary proceedings – one pending before Judge...more

Morris James LLP

Transfer by a Non-Debtor is not a Fraudulent Transfer under DUFTA

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Cystallex Int'l Corp. v. Petróleos de Venezuela, S.A. et al., 879 F.3d 79 (3d Cir. 2018). As a matter of law, a transfer by a non-debtor cannot be a fraudulent transfer under the Delaware Uniform Fraudulent Transfer Act...more

Robins Kaplan LLP

Delaware Court Rules Fraudulent Transfer Recoveries Are Not Capped At The Amount of Creditor Claims

Robins Kaplan LLP on

One of the most powerful remedies available to a judgment creditor or a bankruptcy trustee is the power to avoid and recover fraudulent transfers. Very generally, fraudulent transfers are transfers made by a debtor (1) with...more

Dechert LLP

Substantive Consolidation of Non-Debtors-Standing and Notice Issues

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U.S. courts generally agree that the substantive consolidation should be applied sparingly, and even more so when substantive consolidation of debtors with non-debtors is sought. While many opinions address the grounds for...more

Orrick, Herrington & Sutcliffe LLP

Orrick's Financial Industry Week in Review

Tennessee Chancery Court Denies Motion to Dismiss $164 Million RMBS Suit Brought by Tennessee Pension Fund - On May 24, 2016, Chancellor Carol L. McCoy of the Chancery Court for Davidson County, Tennessee, declined to...more

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