Author Archives: Tianna E Jackson

Asserting a fraudulent transfer claim is one of the most powerful tools a debtor in possession or trustee has under the Bankruptcy Code. Of course, a debtor can only seek to avoid a transfer of property in which it had an interest. On January 27, 2012, in a matter of first impression, the United States Court of Appeals for the Fifth Circuit considered whether a debtor had to establish that it had held legal title to a bank account in order for the debtor to demonstrate that it had transferred an “interest in property of its estate” for purposes of pursuing a fraudulent transfer claim. Rejecting a bright-line rule requiring formal legal title to property, the Fifth Circuit looked to state law in determining that a debtor could prove ownership of the bank account through control over that account. By virtue of its control over the account, the Fifth Circuit held that the debtor could bring a fraudulent transfer claim to seek return of that property (or equivalent damages). Guillermo De La Pena Stettner, et al. v. Steve Smith (In re IFS Financial Corp.), No. 10-20670 (5th Cir. Jan. 27, 2012). Continue reading →

On January 24, 2012, Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware ruled that section 548’s two-year look-back period is not subject to the doctrine of equitable tolling. Meaning, even if a recipient of a transfer of a debtor’s property took some action to prevent a debtor from becoming aware that a fraudulent transfer claim under section 548 existed against such recipient, so long as the transfer of property took place outside of the two-year look-back period, the debtor could not pursue a claim under section 548. See Industrial Enterprises of America, Inc. v. Burtis et al (In re Pitt Penn Holding Co., Inc., et al.), Adv. No. 11-51868, 2011 Bankr. LEXIS 5260 (Bank. D. Del 2012). Continue reading →