FRAUDULENT CONVEYANCES Nassau Academy of Law CLE Live ...

394 B.R. 721 Page 3394 B.R. 721, 50 Bankr.Ct.Dec. 192(Cite as: 394 B.R. 721)[13] Fraudulent Conveyances 9186k9 Most Cited Cases[13] Fraudulent Conveyances 101186k101 Most Cited CasesInsider preferences by insolvent transferor, even whenmade to satisfy valid debts, lack "good faith," for purposeof constructive fraud provision of New York fraudulenttransfer law. N.Y.McKinney's Debtor and Creditor Law§§ 272-274.[14] Bankruptcy 272451k2724 Most Cited CasesHeightened federal pleading standards do not apply toconstructive fraudulent transfer claims, which are subjectto less rigorous pleading requirements. 11 U.S.C.A. §548(a)(1)(B); Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.[15] Bankruptcy 272451k2724 Most Cited CasesPlaintiff need not provide specific facts to support allegationsthat transfer is constructively fraudulent to creditors;all that is required is that plaintiff's allegations give defendantfair notice of what plaintiff's claim is and thegrounds upon which it rests. 11 U.S.C.A. § 548(a)(1)(B);Fed.Rules Civ.Proc.Rules 8(a), 9(b), 28 U.S.C.A.[16] Bankruptcy 216251k2162 Most Cited CasesUnder federal pleading standards, while allegations ofdefendant's knowledge may be made generally, conclusorystatements will not suffice; rather, complaint mustallege some specific facts which support inference ofknowledge. Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.[17] Bankruptcy 2650(5)51k2650(5) Most Cited CasesIndirect benefits, such as synergies or increased access tocapital, that debtor receives as result of considerationpassing to third parties, particularly affiliates, may constitutefair consideration to debtor, for constructive fraudulenttransfer avoidance purposes. 11 U.S.C.A. §548(a)(1)(B).[18] Bankruptcy 270151k2701 Most Cited CasesAvoidance and recovery of property that was subject ofavoided transfer are separate concepts under the BankruptcyCode. 11 U.S.C.A. §§ 544-549, 550.[19] Bankruptcy 270151k2701 Most Cited CasesIt is only to extent that transfer is actually avoided thattrustee may recover from transferees on avoided transferunder the plain terms of Code provision governing liabilityof initial, immediate and mediate transferees. 11U.S.C.A. § 550.[20] Statutes 188361k188 Most Cited CasesStarting point for construction of any statute is plain languageof statute itself.[21] Bankruptcy 270151k2701 Most Cited Cases[21] Bankruptcy 272351k2723 Most Cited CasesWhile it was only to extent that transfers were actuallyavoided that unsecured creditors' committee could recoverfrom transferees on avoided transfers, initial transfereesthat no longer retained any interest in the transferredproperty were not "necessary parties" in cause of action torecover from immediate or mediate transferees, and unsecuredcreditors' committee could pursue avoidance claimsdirectly against immediate or mediate transferees fromwhich it was seeking to recover without having first successfullyprosecuted avoidance claim against initial transferees,and without joining initial transferees as parties tosuit; indeed, even if committee had previously avoidedtransfers in cause of action against initial transferees, itwould still have to avoid transfers as against immediate ormediate transferees as prerequisite to recovering therefrom,unless issue or claim preclusion principles applied.11 U.S.C.A. § 550.[22] Bankruptcy 2159.151k2159.1 Most Cited CasesCourts apply three-part test to determine whether joinderof party is required, under which they inquire (1) whetherabsent party is "necessary" party; (2) whether joinder ofabsent party is feasible; and, if joinder is not feasible, (3)whether court, in equity and good conscience, shoulddismiss lawsuit because nonparty is "indispensable."Fed.Rules Bankr.Proc.Rule 7019, 11 U.S.C.A.; Fed.RulesCiv.Proc.Rule 19, 28 U.S.C.A.[23] Bankruptcy 2159.151k2159.1 Most Cited CasesEffect that decision may have on absent third party is not© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.