Court Smashes Tousa $480M Disgorgement Order

Law360, New York (February 11, 2011, 8:20 PM EST) -- A federal judge has returned $480 million to lenders that financed a joint venture with fallen homebuilder Tousa Inc., flaying a bankruptcy court for treating the payment as a fraudulent transfer that belonged to the debtor’s estate.

Judge Alan Gold of the U.S. District Court for the Southern District of Florida said Friday that the bankruptcy court blindly awarded the Tousa creditors' committee the $480 million that legitimately belonged to a group of lenders known as Transeastern.

In July 2007, Tousa paid Transeastern $421 million to...
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