In Rotstain v. Trustmark Nat’l Bank, plaintiffs sued banks for assisting Stanford and his entities regarding a Ponzi scheme. No. 3:09-CV-2384-N, 2022 U.S. Dist. LEXIS 10332 (N.D. Tex. January 20, 2022). ...more
Answering “no” to a certified question from the Fifth Circuit, the Supreme Court of Texas held that a transferee on inquiry notice of fraud cannot shield itself from clawback without diligently investigating its initial...more
In a 2-1 opinion dated July 22, 2019, the Fifth Circuit held that third parties who paid a receiver to settle estate claims against them are entitled to an order barring other creditors from suing the settling third parties...more
We’ve focused a lot on third-party releases lately, as bankruptcy courts across the country continue to evaluate whether and under what circumstances they are permissible. But, as a recent opinion of the United States Court...more
Troice v. Greenberg Traurig, L.L.P., No. 17-11464 (4/17/19 5th Cir. 2019) - Brief Summary - The Fifth Circuit recently declined to recognize exceptions to the general rule of attorney immunity to non-clients for (1)...more
A prior prior Ask the Receiver® discussed the Fifth Circuit case Janvey v. The Golf Channel, Inc., 780 F. 3d 641 (5th Cir. 2015) (“Golf Channel I”). There the court found The Golf Channel liable to return $6,000,000 paid to...more
In some good news for commercial vendors, the Supreme Court of Texas recently ruled that payments for ordinary services provided to an insolvent customer are not recoverable as fraudulent transfers, even if the customer turns...more
The Fifth Circuit Bar Association’s summary reports: “Appellants were investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme. In their arbitration complaint, they sought $80 million in...more
In a surprise move, the Fifth Circuit vacated its recent, controversial Golf Channel opinion, potentially giving the Golf Channel a second chance in a case that seemed lost. As I discussed in my previous post, the Fifth...more
The Fifth Circuit Court of Appeals recently issued a decision that should make defendants in Ponzi cases shiver in their boots. The court said that the defendant, the Golf Channel, had to return nearly $6 million and that it...more
Receivers handling Ponzi schemes and fraud cases are familiar with the concept of suing the “winners” in the scheme to recover transfers made to them in excess of their investment. Such suits are based on the theory that the...more
Two recent decisions from the Fifth Circuit and Eighth Circuit could expand the fraudulent transfer exposure of unknowing third parties that provide goods, services, or funding to companies operating Ponzi schemes. ...more
“Mulligan,” in golf parlance, is the opportunity to hit a golf shot, a “do over,” when the previous shot was not quite the one desired by the golfer. The “Mulligan” replaces the previous shot, which then does not count toward...more
When a debtor pays the market cost for goods and services provided to it by third-party vendors, these payments normally cannot be recovered as fraudulent transfers in the U.S. That is because the debtor receives reasonably...more
In This Issue: - Those Who Provide Investment Advice on Unsecured Securities Are Subject to Class Actions - A “Mass Action” Under the Class Action Fairness Act Requires at Least 100 Individual Plaintiffs ...more
The D.C. Circuit rejected efforts by the SEC to compel the Securities Investor Protection Corporation to liquidate a broker-dealer that was part of the Stanford Ponzi scheme empire. The investors had purchased CDs from an...more