Fraudulent Transfer–Distinguishing Between A “Recipient” And A “Transferee” (Jalbert v. Gryaznova)

A conduit (photo by Marilyn Swanson) By Donald L. Swanson Under the Bankruptcy Code, an “initial transferee” is strictly liable for a fraudulent transfer—there is no good faith, subsequent advance, or similar defense. Fortunately for some fraudulent transfer defendants, it’s possible to be the “recipient” of a transfer as a mere conduit, without becoming a “transferee”... Continue Reading →

Fraudulent Transfer Claims in Bankruptcy After Statute of Limitations Expires (In re Tribune)

A closed door By: Donald L Swanson “We need not resolve” Appellants’ arguments, but we find such arguments to be fraught with “lack of statutory support, ambiguities, anomalies” and to conflict with “purposes of the Code.” --Second Circuit Court of Appeals, from December 19, 2019, opinion in In re Tribune Company Fraudulent Conveyance Litigation. As a... Continue Reading →

Fraudulent Transfer’s Good Faith Defense: A Futility Exception to Investigation?

By: Donald L Swanson Court Ruling:  A transferee on inquiry notice of fraud must diligently investigate its suspicions, before a good faith defense is available, even if an investigation would have revealed nothing. This ruling is from Janey, Receiver v. Magness, Case No. 19-0452 in the Texas Supreme Court (decided December 20, 2019), which Court is... Continue Reading →

Fraudulent Transfer Claims — In Constitutional Limbo

By: Donald L. Swanson “we assume without deciding, that the fraudulent conveyance claims in this case are Stern claims.” [Fn. 1] From unanimous U.S. Supreme Court decision in Executive Benefits Insurance Agency v Arkison (Decided June 6, 2014). [Fn. 2] It’s a curious thing, this failure-to-decide the constitutional status of fraudulent transfer claims in bankruptcy. Here’s... Continue Reading →

A State-Sanctioned Fraudulent Transfer?

By: Donald L Swanson The majority’s opinion “permits Vandelay to reap a windfall that borders on the obscene.” Hon. William B. Cassel, Nebraska Supreme Court Justice, Dissenting in Wisner v. Vandelay Investments, L.L.C. (Decided 8/24/2018). You’re not going to believe this . . . seriously. Facts of the Case In 2014, Vandelay Investments acquired 650 acres... Continue Reading →

Special Settlement Problems When Defendant Claims Poverty or Non-Collectibility

By: Donald L. Swanson “I’d be happy to pay the million dollars I owe you. The problem is that I have only two of them.” --A defendant’s claim of poverty and non-collectibility in settlement negotiations. A defendant's poverty/non-collectibility claim creates an interesting dynamic in mediation and other negotiations. And that’s true whether the defendant is an... Continue Reading →

Business Owners Shifting Risks of Failure to Trade Creditors: Solutions are Needed

By Donald L. Swanson “Lending to the most highly indebted companies in the U.S. and Europe is surging.”— Wall Street Journal [Fn. 1] When a large business files for bankruptcy, there is one group that almost always suffers. It is a group with little-to-no power. It is the unsecured trade creditors. It is those that supply... Continue Reading →

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 →

Blog at

Up ↑

%d bloggers like this: