11th Circ. Backs Broad Fraudulent-Transfer Liability

Law360, New York (May 15, 2012, 7:41 PM EDT) -- A bankruptcy court may force a creditor to disgorge funds it received from a debtor if the funds were acquired through a fraudulent transfer, the Eleventh Circuit ruled Tuesday in a published decision that backed a broad view of liability while ruling against entities that lent money to homebuilder Tousa Inc.

A three-judge panel clarified an issue related to section 550(a)(1) of the bankruptcy code, which allows a party to recover the value of a fraudulent transfer either from the initial transferee or from an “entity for...
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