Spotlight On Section 550 Of The Bankruptcy Code

Law360, New York (July 18, 2012, 5:09 PM EDT) -- The "benefit of the estate" language of section 550 of the Bankruptcy Code informs and guides most bankruptcy practice. It permits the trustee to recover property from a transfer avoided pursuant to sections 544, 545, 547, 548, 549, 553(b), or 724(a). However, the "benefit of the estate language" often is limited by courts and practitioners to take into consideration only benefit to creditors of the estate; rather than to all of the various constituencies comprising the bankrupt estate, including equity. This is too narrow an application of the statute....

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