Recipient of Fraudulent Transferred Property Can Recoup Some Expenses

An Maryland attorney wrote me an email about his representation of a person who received what was determined to be the fraudulent transfer of a piece of real property. His client had spent money maintaining and repairing the property. The attorney wanted to know if his client was entitled to payment for money he spent on property fraudulently transferred to him by a bankruptcy debtor. Continue reading

Can Trustee Recover Fraudulent Transfer To A Charitable Organization?

People who receive money from Ponzi schemes usually have to return the money if the Ponzi organizer filed bankruptcy. The bankruptcy trustee typically pursues recipients of Ponzi profits as transferees of fraudulent transfers made by the Ponzi organizer. What happens when the Ponzi organizer donates part of Ponzi profits to a charity? Continue reading

Reverse Piercing of Corporate Veil

Sometimes a creditor with a cause of action against a corporation will try to “pierce the veil” of the corporation to hold liable the owners of the company if the creditor believes the owners have significant assets. There is a different concept called “reverse piercing” when a creditor will try to attack a corporation and its assets to satisfy a claim initially brought against the individual owners. Continue reading

Transferee of Fraudulent Transfer From Ponzi Scheme

People who receive distributions of money from Ponzi schemes usually are expected to return the money to a trustee who takes over the operation when the Ponzi organizer files bankruptcy. The trustee usually attempts to “claw back” money distributed to the investors, especially money representing winnings or profits. This recent Florida bankruptcy case produced a slightly different result for a Ponzi investor. Continue reading

Are Investor’s Ponzi Scheme Profits Recoverable As Fraudulent Transfer Proceeds?

One of the defenses to a fraudulent transfer action is that the debtor’s transfer in question was for “reasonably equivalent value.” The general rule is that a transfer to repay a loan is a transfer for value because the transferor receives a deduction in the principal and interest owed on the debt. Continue reading

Does Pre-Bankruptcy Planning Permit Transfer Of Car Title To Spouse

Bankruptcy debtors use their $4,000 wildcard exemptions most often to protect cars. The debtor can apply the wildcard only to cars in the debtor’s name. For example, if a married couple is considering Chapter 7 bankruptcy and both of the couple’s cars are titled in the husband’s name the wife cannot apply her $4,000 wildcard exemption to either of the cars because she owns no car.

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