“Bankruptcy Trustees May Have Special Card to Play After Kipnis Decision”
Chicago Daily Law Bulletin 11/02/16 By Faye B. Feinstein and Travis J. Eliason
Below is an excerpt:
If the analysis of a Florida bankruptcy court is correct,
transfers of property may be vulnerable to avoidance by
bankruptcy trustees for more than twice as long as is commonly
assumed —for 10 years after the transfer took place.
Under federal bankruptcy law, a trustee may claw back from the
recipient assets —or their equivalent dollar value —obtained in a
“fraudulent transfer”—i.e., one made by the transferor (a) with
the actual intent of hindering, preventing or delaying creditors from
being paid, or (b) for less than reasonably equivalent value in return,
at a time when the transferor was insolvent or was made
so by the transfer. The trustee distributes those recovered assets
to the transferor’s creditors.