Summary: The Trustee sought to recover a transfer made by the Debtor to James Smith, the principal of the Debtor, pursuant to 11 U.S.C. §§ 547 and 550(a). At issue was whether the Debtor was insolvent at the time of the transfer. The Trustee argued that based on the Debtor’s tax returns and the presumption of insolvency during the 90 days preceding the filing of bankruptcy, that the Debtor was insolvent, whereas Smith asserted that based on the scheduled value of assets and amount of liabilities, the Debtor was solvent. Pursuant to 11 U.S.C.
Summary: As evidence of the insolvency of the Debtor in support of a long-running preference action, the Trustee sought to introduce Affidavits from his paralegal, from the Director of Financial Services of one of the Debtor’s largest creditors, from the Examiner appointed in the case and from himself.
Summary: The Chapter 11 Trustee sought to avoid and recover as preference, premium payments that Railworks transferred made to CPG within 90 days of filing bankruptcy, which later transferred them to TIG, which provided various insurance coverage to Railworks. While CPG had physical control over the transfers it received, it held the funds in trust for TIG. Pursuant to 11 U.S.C.
Summary: The Trustee sought to avoid payments made to Craft Air Services of $60,000 for services that were provided to the Debtor Tanglewood Farms. The dispute turned on whether the obligation to Craft Air was solely the liability of James Winslow, the 100% owner of Tanglewood Farms, or also of Tanglewood Farms itself.
Abstract: The law of preferential transfers permits the trustee of a bankruptcy estate to avoid transfers made by the debtor to a creditor on account of a prior debt in the 90 days leading up to the bankruptcy proceeding. The standard for avoiding these preferential transfers is one of strict liability, on the rationale that preference actions exist to ensure that all general creditors of the bankruptcy estate recover the same proportional amount, regardless of the debtor’s intent to favor any one creditor or the creditor’s intent to be so favored.
Summary: The Trustee sought turnover of funds from the Mary Larabee, the wife of the cousin of the 100% owner of Tanglewood Farms) as prefential transfers under 11 U.S.C. § 547, 550 and 551.
Summary: Trustee brought an adversary proceeding seeking to avoid two payments to Open Grounds Farm allegedly made by the debtor for land rent owed by the debtor’s president, James H. Winslow. Defendants answered and the Trustee sought leave to amend his complaint in two regards. The first was to correct a misstated date in the complaint, which was an obvious and harmless error, to which the Defendant did not oppose correction. The second amendment sought by the Trustee was to include of additional payments potential subject to avoidance under 11 U.S.C.
Summary: Lee and Patsy Hilliard were married in 1975 and both served as officers of Royal Tours. Following their separation in 2008, the couple entered into a Separation Agreement whereby Patsy Hilliard resigned her position with Royal Tours and accepted a cash payment from Royal Tours in lieu of an Equitable Distribution consisting of 108 monthly payments of $3,500. The Chapter 7 Trustee alleged that the twelve payments made prior to the bankruptcy filing were preferences pursuant to 11 U.S.C. § 547.
Summary: ESA Environmental Specialists, Inc. (ESA) was an engineering firm that had various constructions projects under contract with the federal government. As such, ESA was required to obtain surety bonds to secured completion of the contracts and pay vendors and subcontractors. ESA originally obtained eight surety bonds from Hanover in 2006. In April 2007, ESA borrowed $12.2 million from Prospect Capital to fund operations. Shortly, thereafter, ESA sought seven additional surety bonds from Hanover.
Summary: Under the test formulated by the Supreme Court in Stern v. Marshall the court may enter final judgment in a core proceeding where "the action at issue stems from the bankruptcy itself or would necessarily be resolved in the claims allowance process." Stern, 131 S. Ct. at 2618. Where a defendant has filed a proof of claim, a fraudulent transfer action brought under either section 548 or section 544 becomes a part of the process of allowance and disallowance of claims. See Langenkamp v. Culp, 498 U.S.