Tag: fraudulent conveyance

Bankr. M.D.N.C.: In re Novara- Uniform Transfer to Minors and Fraudulent Conveyances


Ms. Novara deposited a check from her mother for $10,000 into her child’s custodial account twenty-seven (27) days prior to filing Chapter 7 bankruptcy. The Trustee sought to set this aside as a fraudulent conveyance and sought summary judgment.

To prevail on a motion for summary judgment premised on a fraudulent transfer, pursuant to 11 U.S.C. § 548(a)(1)(B)(I), the Trustee must be able to meet four elements:

(1) the debtor must have an interest in the property;
(2) the transfer must have been made within two years before the date of filing the petition;
(3) the debtor must have received less than a “reasonably equivalent value” in exchange for the transfer; and
(4) the debtor must have been insolvent on the date that the transfer was made.… Read More

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Bankr. E.D.N.C.: Angell v. Morris (In re Tanglewood Farms)- Reasonably Equivalent Value


More reasonably equivalent value discussions in the Tanglewood Farms case.


Not every order granting avoidance of a judgment lien or for relief from the stay on a car are treated as a written opinion,  but maybe since these  reasonably equivalent value cases are becoming nearly as common, they will stop being treated as such.

For a copy of the opinion, please see:

Angell v. Morris (In re Tanglewood Farms)- Reasonably Equivalent Value

See also:



http://ncbankruptcyexpert.com/?p=4829 Read More

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4th Circuit: In re Pfister- No Resulting Trust in Transfer from Wife and Husband to Husband’s Corporation.


Patricia Pfister and her husband, Phillip Pfister purchased real property on May 10, 2001. Originally, this property was to be purchased by Architectural Glass Construction, Inc. (“AGC”), a corporation wholly owned by Mr. Pfister, but, on the advice of accountants, instead at the closing it was instead purchased and financed by the Pfisters, with the intention of leasing the property to AGC. In practice, however, AGC never paid the Pfisters, but paid the mortgage directly. In 2002, the mortgage was refinanced, with AGC now actually liable for the mortgage note. Over the next six years, the property was repeatedly refinanced, with the obligor under the new notes changing between the Pfisters and AGC.… Read More

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N.C. Court of Appeals: Currie v. Poteat- Nunc Pro Tunc and Lis Pendens


In February 2003, Currie, serving as the executor for the Estate of Della Brown, brought suit against the Poteats, for conversion of funds which were used to purchase their home, filing a notice of lis pendens on March 13, 2003. This action was subsequently voluntarily dismissed without prejudice in open court on September 7, 2004, so that Currie could be re-qualified as the executor of the estate. On September 8, 2004, the Potent’s attorneys recorded a Deed of Trust against their home, securing the unpaid attorneys’ fees, and transferring a remainder interest to the Potent’s daughter, with a reservation of a life estate.… Read More

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Bankr. E.D.N.C.: Angell v. Bacchus- Genuine Issue of Material Fact and Fraudulent Conveyance


Pursuant to 11 U.S.C. § 548, the Chapter 7 Trustee sought to recover transfers made for the benefit of Bacchus within two years of the bankruptcy filing, arguing that the transfer were a fraudulent conveyance. Bacchus disputed the allegations that the Debtor received less that the reasonably equivalent value, as the payments were for an obligation owed by the debtor to Bacchus’ deceased father for the purchase of grain, which had been stored on the debtor’s property. The Trustee contended that the sales price for the grain should have been fixed as of the date of death of the Bacchus’ father rather than the time of sale.… Read More

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Bankr. E.D.N.C.: Oliver v. Bateman, et al.- Iqbal/Twombley and Fraudulent Transfer Pleadings


On September 26, 2008, Luther Bateman transferred, subject to retention of a life estate, property located at 106 Sanderline Road, Shawboro, North Carolina to his children, Carol Bateman Cooper, Timothy Ross Bateman, Louis Eugene Bateman, and Robert Charles Bateman (“the Defendants”). On August 4, 2010, Mr. Bateman filed Chapter 7 and valued his life estate in the Property to be approximately $186,000.00, subject to a mortgage in the amount of $15,395.99. The Trustee then sought to avoid and recover the transfer of the Property to as fraudulent transfers, pursuant to 11 U.S.C. §§ 548; N.C. Gen. Stat. § 39-23.4; and 11 U.S.C.… Read More

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Bankr. E.D.N.C.: Crampton v. Kohler- Conversion of Non-exempt funds into an Exempt IRA was not a Fraudulent Conveyance


After consulting with a bankruptcy attorney, the Debtors sold personal property at auction, receiving $14,000 in proceeds. Two days before filing Chapter 7, the Debtors used $12,000 to fund IRAs and the remainder for insurance and vehicle repairs. The Trustee sought to avoid the contributions to the IRAs as fraudulent conveyances.

Following, Ford v. Poston, 773 F.2d 52, 54 (4th Cir. 1985), the “[m]ere conversion of property from
non-exempt to exempt on the eve of bankruptcy-even though the purpose is to shield the asset from creditors-is not enough to show fraud.” The Trustee argued that converting non-exempt property to an IRA is fraudulent unless it is done for the purpose of contributing to the debtor’s overall retirement plan.… Read More

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Bankr. EDNC: BB&T v. Murray- Avoidance of Fraudulent Conveyance; Ultra Vires Acts


A few hours prior to a foreclosure sale, 15 parcels of real property were transferred to the Debtors by three corporations owed by the Debtors.  The Debtors shortly thereafter filed Chapter 11.  BB&T commenced an Adversary Proceeding seeking to avoid the transfers as fraudulent conveyances and because some were made ultra vires and brought a Motion for Summary Judgment.

In determining whether a transfer was a fraudulent conveyance the court first turned to the non-exclusive list of factors found in N.C. Gen. Stat. 39-23.4(b):

  1. The transfer or obligation was to an insider;
  2. The debtor retained possession or control of the property transferred after the transfer;
  3. The transfer or obligation was disclosed or concealed;
  4. Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
  5. The transfer was of substantially all of the debtor’s assets;
  6. The debtor absconded;
  7. The debtor removed or concealed assets;
  8. The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
  9. The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
  10. The transfer occurred shortly before or shortly after a substantial debt was incurred;
  11. The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor;
  12. The debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor reasonably should have believed that the debtor would incur debts beyond the debtor’s ability to pay as they became due; and
  13. The debtor transferred the assets in the course of legitimate estate or tax planning.
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Bankr. MDNC: In re Stout- Transfer of Property to Tenancy by Entireties with Intent to Hinder, Delay or Defraud Creditors

The Debtor acquired a piece of real property in 2001 solely in his name.  In 2007, three months after the Plaintiff/Creditor file a lawsuit against the Debtor, the Debtor transferred the property to himself and his wife as Tenants by the Entireties.  Four months later, the Debtor filed Chapter 7.

The Plaintiff brought an action against the Debtor under 11 U.S.C. § 727(a)(2) to deny his discharge on the basis that the transfer of property had been  done to hinder, delay or defraud creditors, specifically to thwart collection on any judgment resulting from his State Court Action.

The Court began by recognizing that a transfer by itself is insufficient to show an intent to hinder, delay or defraud creditors, and then turned to the various “badges of fraud”, including:

1. … Read More

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