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...
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