Fraudulent Transfers: U.S. Supreme Court Lets an Injustice Stand (Henry v. Weiss)

By: Donald L. Swanson The case is Henry & Buresh v. Weiss (Supreme Court Case No. 17-1210). The U.S. Supreme Court denied certiorari on May 29, 2018. This denial allows an injustice to stand, which is a travesty. I’ll try to explain. Facts Michael Bello was sole shareholder, director, and president of Walldesign, Inc. Over a... Continue Reading →

Leveraged Buyouts as Fraudulent Transfers: Battling the § 546(e) “Safe Harbor” Defense

By Donald L. Swanson Every now and then a battle shapes up between two heavyweights: --Think Muhammed Ali v. George Forman; Magic Johnson v. Larry Bird; Bart Starr v. Roger Stauback. It looks like such a battle is shaping up between two Federal court heavy-weights on bankruptcy issues: --It’s between the Second Circuit Court of Appeals... Continue Reading →

Reverse Fraudulent Transfer Claim: Venezuela and Disputes Over Gold

  By: Donald L Swanson Ancient History Millenia ago, advanced civilizations flourish around the Mediterranean, across east Asia, and in portions of the Western Hemisphere. Mediterranean and east Asia civilizations communicate and trade, back then, across silk roads but remain isolated from the Western Hemisphere. That isolation continues for a very-long time: until 1492. In the... Continue Reading →

Subchapter S Revocation as Fraudulent Transfer? Courts are Finally Getting it Right!

By Donald L. Swanson “For the reasons set forth below, the Court holds that S corporation status is not ‘property’ for the purposes of 11 U.S.C. §§ 544(b), 548.” --Judge Kevin R. Huennekens in Arrowsmith v. USA (In re Health Diagnostic Laboratory, Inc., Case No 17-04300, Doc. 54 (Bankr.E.D.Va., December 6, 2017). The reasons identified by... Continue Reading →

Recovering Tax Payments From IRS as Fraudulent Transfers (§ 544(b)): The “Actual Creditor” Issue

By: Donald L. Swanson The fact scenario is this. An S corporation pays its own taxes each year. Then it files bankruptcy. So, the bankruptcy trustee sues the IRS for recovery of those tax payments as fraudulent transfers.  It does so under two different sections of the Bankruptcy Code: (i) Under § 548, for payments within... Continue Reading →

What Happens to Fraudulent Transfer Claims When Barred by Bankruptcy’s Two-Year Statute of Limitations?

By Donald L. Swanson Two Hypotheticals and a Question: First Hypothetical: Debtor makes a fraudulent transfer shortly before filing Chapter 7 bankruptcy. The Chapter 7 Trustee refuses to pursue the fraudulent transfer claim, and the Bankruptcy Code’s two-year statute of limitations expires. Second Hypothetical: Debtor makes a fraudulent transfer shortly before filing Chapter 11 bankruptcy.... Continue Reading →

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