Stay Doesn't Affect Property Transferred By Fraud: 10th Circ.

Law360, New York (March 12, 2013, 6:31 PM EDT) -- Allegedly fraudulently transferred property is not part of a bankruptcy estate until recovered and is therefore beyond the reach of an automatic stay, the Tenth Circuit said Tuesday in a circuit-splitting decision arising from the Chapter 7 of wind power company Generation Resources Holding Company LLC.

In a precedential ruling, a three-judge panel said that a standard interpretation of the federal statute governing the recovery of property in bankruptcy does not include fraudulently transferred property that has yet to be recovered.

“We adopt the statute’s plain...
To view the full article, register now.