Commingling of funds frequently occurs in fraud cases and is notably common in Ponzi scheme cases. It occurs when funds belonging to one party are deposited into the same bank account as funds that belong to a different party. Because money is fungible, it is not possible to trace exactly which dollars belong to which party if they reside in the same bank account.
Commercial Fraud Committee
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On May 15, 2017, the Supreme Court in Midland Funding, LLC v.
When the trustee of a bankrupt company sues to avoid allegedly fraudulent transfers, one threshold element that he or she must generally show is that the transfer left the debtor with “unreasonably small capital.” Recent appeals in the SemCrude and Adelphia bankruptcy cases demonstrate that this a tough showing to make.
Section 544(b)(1) of the Code enables a trustee to “avoid any transfer of an interest of the debtor in property or any obligation incurred by the debtor that is voidable under applicable law by a creditor holding an unsecured claim that is allowable under section 502....”[1] Pursuant to § 544(b), a truste
In a recent decision, the U.S. Court of Appeals for the Sixth Circuit found itself “obliged to explore some uncharted territory of Ohio substantive and procedural jurisprudence” arising out of fraudulent transfer and related claims from a Ponzi scheme.
In Meoli v. The Huntington National Bank (In re Teleservices Group Inc.),[1] the U.S.
Section 523(a)(2)(A) of the Bankruptcy Code provides that to the extent a debt is obtained by “false pretenses, a false representation, or actual fraud[,]” it is excepted from discharge.[1] In the past, many courts have read the phrase “false pretenses, a false representation, or actual fraud” as meaning only fraud made through misrepr
The Commercial Fraud Committee had a productive year, producing three webinars, six newsletters, several case law eblasts, and the continuation of the committee-wide conference call program with four calls this year.
It’s widely known that avoidance actions to claw back fraudulent transfers can be filed after the typical four-year limitations period has expired under most states’ versions of the Uniform Fraudulent Transfers Act (or the new Uniform Voidable Transactions Act) by invoking the “discovery rule” in those statutes.
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