When a court begins its opinion with the statement that “bad facts make bad law,” you know you are in for a good read. Such was the case with The Ninth Circuit Court of Appeals which recently held that two sellers of real estate and design services were liable for the return of payments alleged to be fraudulent transfers made by the debtor’s principal using misappropriated corporate funds. Continue Reading Seller Beware! The Ninth Circuit Holds Innocent Sellers Liable for the Return of Misappropriated Company Funds

In the first installment of this article, we discussed the prevalence of preference litigation and some of the commonly-available defenses to business vendors to limit or even eliminate liability to the bankruptcy estate. While preference actions are by far the most common type of avoidance litigation brought in bankruptcy cases, this is not the end of the story.  Bankruptcy estate representatives can also bring actions to avoid fraudulent transfers and post-petition transactions. We will first discuss the elements of each of these avoidance claims, followed by some tips to avoid being the target of such an action in the first place or, if a defendant, some strategies to limit liability.  Continue Reading Bankruptcy Avoidance Litigation Part II – Do I Really Have to Give That Payment Back?