Dealing a major blow to the trustee’s efforts to recover fraudulent transfers on behalf of the bankruptcy estate of the company run by Bernard Madoff, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York held in SIPC v. Bernard L. Madoff Investment Securities LLC1 that the Bankruptcy Code cannot be used to recover fraudulent transfers of funds that occur entirely outside the United States.
The Eleventh Circuit’s recent opinion in Wiand v. Lee clarifies longstanding issues relating to an equity receiver’s standing to pursue clawback claims for the benefit of the receivership estate under the Florida Uniform Fraudulent Transfer Act (“FUFTA”). See Wiand v. Lee, 2014 WL 2446084 (11th Cir. Jun.
Judge Jed S. Rakoff of the Southern District of New York last week ruled that the U.S. Bankruptcy Code does not permit a bankruptcy trustee to recover foreign transfers. Specifically, Judge Rakoff refused to allow Irving Picard, the trustee of Bernard L. Madoff Investment Securities LLC (“BLMIS”), to recoup monies initially transferred from BLMIS to non-U.S.
International businesses involved in transactions associated in some way with U.S. citizens received a measure of relief over the 4th of July holiday weekend.
Who Should Read This? Anyone that deals in distressed debt, and in particular anyone that acquires distressed or defaulted bond debts.
Law v Siegel, 134 Sup.Ct. 1188, 188 L.Ed.2d 146 (2014) -
A bankruptcy court ordered that a debtor’s homestead exemption be surcharged to pay the attorney’s fees of a Chapter 7 incurred in overcoming the debtor’s fraud. The order was affirmed on appeal until it reached the Supreme Court.
On Monday, the U.S. Supreme Court refused to take up an appeal brought by Irving Picard, the court-appointed bankruptcy trustee charged with recovering assets on behalf of Madoff’s bankruptcy estate and distributing them to victims of Madoff’s massive Ponzi scheme.
Recoveries from fraudulent conveyance lawsuits can be a significant source of recovery for creditors of bankruptcy estates. Because a plaintiff seeking to avoid a prepetition transfer as constructively fraudulent must demonstrate that the debtor was insolvent or inadequately capitalized at the time of the challenged transfer, valuation analyses that support allegations of insolvency are critical.
Over the years, clients have sought my advice after they have obtained a judgment against a limited liability company or a corporation, and after they have tried, without success, to collect on that judgment. All of the typical judgment enforcement methods have already failed. Because judgment debtors generally do not volunteer payment and sometimes will take steps to make it much more difficult for a creditor to collect, this scenario is somewhat common. In response, clients will ask what they can do. There are a number of options. These include putting the ju
The U.S. District Court for the Southern District of New York, on April 27, 2014, issued a decision directing the bankruptcy court to dismiss fraudulent transfer complaints brought by the Madoff Securities Investor Protection Act of 1970 (“SIPA”) trustee against investment funds, their customers and individuals when the trustee failed “plausibly [to] allege that defendant[s] did not act in good faith.” SIPC v. Bernard L. Madoff Inv. Sec. LLC, 2014 WL 1651952, at *5 (S.D.N.Y. April 27, 2014).