FRAUDULENT CONVEYANCES Nassau Academy of Law CLE Live ...

394 B.R. 721 Page 2394 B.R. 721, 50 Bankr.Ct.Dec. 192(Cite as: 394 B.R. 721)that renders the exchange with debtor fraudulent. 11U.S.C.A. §§ 544, 548.[3] Bankruptcy 2645.151k2645.1 Most Cited CasesFor initial transferor to have "actual knowledge" ofscheme that allegedly renders its transaction with thedebtor fraudulent on a collapsed transaction theory, initialtransferor must have been intimately involved in formulationor implementation of plan by which proceeds werechanneled to third party. 11 U.S.C.A. §§ 544, 548.[4] Bankruptcy 2645.151k2645.1 Most Cited CasesFor initial transferor to have "constructive knowledge" ofscheme that allegedly renders its transaction with thedebtor fraudulent on a collapsed transaction theory, initialtransferor must have become aware of circumstances thatshould have led it to inquire further into circumstances oftransaction, but failed to make that inquiry. 11 U.S.C.A.§§ 544, 548.[5] Bankruptcy 2650(3)51k2650(3) Most Cited CasesValid antecedent debt provides adequate consideration tosupport the grant of security interest, for fraudulent transferavoidance purposes. 11 U.S.C.A. §§ 544, 548.[6] Bankruptcy 272451k2724 Most Cited CasesComplaint to avoid transfer as intentionally fraudulent tocreditors mustsatisfy heightened pleading requirements of Federal Rulesof Civil Procedure. 11 U.S.C.A. § 548(a)(1)(A);Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.[7] Bankruptcy 272451k2724 Most Cited CasesParty asserting intentional fraudulent transfer claim mustspecify the property that was allegedly conveyed, the timingand frequency of those allegedly fraudulent conveyances,and the consideration paid. 11 U.S.C.A. §548(a)(1)(A); Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.[8] Bankruptcy 272451k2724 Most Cited CasesAllegations that debtor made an aggregate amount or seriesof cash or other transfers over period of time, withoutfurther particularization, are insufficient to state intentionalfraudulent transfer claim. 11 U.S.C.A. §548(a)(1)(A); Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.[9] Bankruptcy 272451k2724 Most Cited CasesFraudulent transfer avoidance counts in complaint filedby unsecured creditors' committee, to extent grounded onactual, and not just a constructive, fraud theory, lackedparticularity required to satisfy heightened federal pleadingstandard, where committee complained only of "net"loss to Chapter 11 estate as result of transactions, and didnot identify specific affiliates to which transfers weremade or specific dates of those transfers. 11 U.S.C.A. §548(a)(1)(A); Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.[10] Bankruptcy 272451k2724 Most Cited CasesConstructive fraud counts of fraudulent transfer avoidancecomplaint that unsecured creditors' committee had filedagainst Chapter 11 debtors' prepetition lenders on a collapsedtransaction theory, based on debtors' subsequenttransfer of loan proceeds to affiliated companies ownedby debtors' principals, sufficiently alleged that loan proceedswere transferred to these affiliates under circumstancesthat constituted a constructive fraud on debtors'creditors, by alleging generally that subsequent transferswere made at time when debtors were insolvent for lessthan reasonably equivalent value; however, committee'sfailure to allege facts supporting inference that lendersknew, or had reason to suspect, that loan proceeds wouldsubsequently be transferred for less than reasonablyequivalent value to affiliates, or that debtors were insolventat time, prevented committee from stating avoidanceclaim against lenders on collapsed transaction theory. 11U.S.C.A. § 548(a)(1)(B).[11] Fraudulent Conveyances 57(3)186k57(3) Most Cited CasesBy its terms, constructive fraudulent transfer provision ofNew York law dealing with transactions that leave debtorwith unreasonably small capital applies only to conveyances,not to obligations. N.Y.McKinney's Debtor andCreditor Law § 274.[12] Fraudulent Conveyances 77186k77 Most Cited CasesDelivery of collateral to secure a non-avoidable debt orobligation constitutes a transfer supported by "fair consideration,"within meaning of constructive fraud provisionof New York fraudulent transfer law. N.Y.McKinney'sDebtor and Creditor Law §§ 272-274.© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.