Written by: Wendy Hagenau
Powell Goldstein LLP; Atlanta
When looking for evidence of fraudulent intent, lack of good faith or lack of equivalent value, two recent cases involving fraudulent conveyance actions brought under section 548 of the Bankruptcy Code remind us to look to words spoken and written by the parties contemporaneously with the transaction. Both cases support plaintiffs’ reliance on such statements in the face of subsequent “explanations” by the defendants. Both cases also provide additional examples of what constitutes reasonably equivalent value in a constructive fraudulent conveyance analysis.
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Written by: Jason Binford[1]
Haynes and Boone, LLP; Dallas
Part I of this four-part series discussed, in general terms, the prohibition of collusion in bankruptcy sales under section 363(n) of the Bankruptcy Code. Part II discussed the fine line separating permissible collaboration from impermissible collusion. In this third part another fine line will be explored: the line between agreements that control the sales price at an auction, and agreements that only affect the sales price. As in Parts I and II, the discussion generally is from the point of view of a prospective bidder and addresses the knowledge such a bidder should have to avoid liability under § 363(n). Part IV will discuss the finality of sale orders, i.e., the time period within which a party must bring a § 363(n) action. That discussion will generally be from the point of view of a § 363(n) plaintiff. Therefore, while the information provided in Parts I through III is helpful to both § 363(n) plaintiffs and defendants, stay tuned for Part IV if you are looking for a roadmap of how to hold a suspected colluder accountable under the Bankruptcy Code.
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Written by: David Leibowitz
Leibowitz Law Center;
Waukegan, IL
Just when we think we’ve seen it all, something new shows up. This story was reported recently in the Houston Chronicle.
The Whites, a couple from Mesquite, Texas, filed a chapter 13 case in 2006. They had been unable to keep up the payments on their adjustable rate mortgage. The chapter 13 plan was designed to allow them to satisfy the arrearage. Unfortunately, they were unable to keep up their plan payments.
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Written by: Dr. Eberhard Braun
Schultze & Braun; Achern, Germany
The term “fraudulent insolvency” needs explaining before we go any further: It is an insolvency either caused by or involving criminal acts. “Pure fraudulent insolvency” caused only by criminal acts—generally by fraudulent misrepresentation—is a form of insolvency practiced by suppliers of financial services or other intermediaries.
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Written by: Cass S. Weil
Moss & Barnett; Minneapolis
Does this sound familiar? A client contacts you, very upset. A debtor, often a former spouse, significant other or business partner has filed bankruptcy. Your client has looked at the debtor’s bankruptcy schedules and noticed one or more of the following: Individual assets or whole categories of assets that are valued by the debtor at a fraction of the value “known” to your client, assets that the debtor used to own that do not appear or sources of income that the debtor had previously described to your client that do not appear. Your client wants to stop this possible fraud and recover, to the maximum extent possible, the money that the client is owed by the debtor. What advice should you give to your client and what should you do?
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ABI's 26th Annual Spring Meeting,
the networking and CLE event of 2008, will be held April 3-6 at Washington, D.C.'s Renaissance Hotel in the Nation's Capital! Join us during cherry
blossom season for exciting and informative sessions, including a luncheon
keynote by Supreme Court Justice Samuel A. Alito, Jr.
The committee will meet jointly
with the Business Reorganization committee on Friday, April 4, from 4:00 to 5:30
p.m. to discuss “363 Sales - How Free is Free & Clear? Does new case
law, fraud in the process or Loan to Own (or Loan to Buy) Deals, and other
recent trends Negate the Ability to Get a 363(m) Order and/or impact successor
liability exposure?”
Speakers include: Lawrence A. Katz, Venable LLP;
Vienna, Va.; Jo Ann J. Brighton,
Kennedy Covington Lobdell & Hickman, LLP; Charlotte, N.C.; Hon. Judith K. Fitzgerald, U.S.
Bankruptcy Court; Pittsburgh; and Kenneth
A. Rosen, Lowenstein Sandler PC; Roseland, N.J.
