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Commercial Fraud Committee


Michael D. Napoli
Post date: Wednesday, August 26, 2020

The COVID-19 pandemic has wreaked economic havoc and created a breeding ground for fraud. Existing swindles will be uncovered as victims seeking liquidity attempt to withdraw their funds only to find that their rock solid investment was nothing but smoke. New scams will arise. Many investors desperately need income or growth that traditional investments can no longer provide.

Post date: Wednesday, August 26, 2020

Where chapter 7 Trustees are now increasingly faced with the prospect of avoiding and recovering fraudulent transfers of a debtor’s pre-petition assets that implicate the concepts of extraterritoriality and foreign law, choosing the “right” foreign “applicable law” under Code section 544 causes of action, becomes increasingly important.

Christian A. Pereyda
Post date: Wednesday, August 26, 2020

In a factually complex and quickly criticized opinion,[1] a panel of the Tenth Circuit recently held that a chapter 7 trustee cannot maintain a fraudulent transfer action against subsequent transferees of a fraudulent transfer if the subsequent transferee receives only proceeds of the “property that was set aside as fraudulently transf

Post date: Monday, June 15, 2020

Bankruptcy Code § 548 allows creditors and trustees to avoid transactions that unfairly or improperly deplete the bankruptcy estate.[1] Transfers made within two years[2] preceding a bankruptcy filing can be clawed back if either (1) the debtor attempted to defraud creditors,

Post date: Monday, June 15, 2020

The COVID-19 crisis has made a substantial economic impact on businesses and industries worldwide. The sharp decrease in airline travel has caused the aviation industry to be particularly affected by the crisis. This has caused a detrimental economic effect on airlines, suppliers, manufacturers and other aviation companies.

Post date: Monday, June 15, 2020

Courts are divided as to whether rule 9(b)’s heightened pleading standard applies to fraudulent-transfer claims. Normally, a complaint under the federal rules must only contain “a short and plain statement of the claim showing that the pleader is entitled to relief….”[1] But sometimes, stricter standards apply.

Post date: Monday, June 15, 2020

If you can look into the seeds of time,
And say which grain will grow and which will not,
Speak then unto me, who neither beg nor fear
Your favors nor your hate.
—William Shakespeare
Macbeth, Act I, Scene 3

Ingrid Warrner
Post date: Monday, June 15, 2020

A common exception to the discharge of a debt is that the debtor obtained credit by use of a false financial statement.[1] The Fifth Circuit recently examined this exception and provided important insight into what it means for a creditor to reasonably rely on a debtor’s statement as required by § 523(a)(2)(B).

Post date: Thursday, December 19, 2019

It has been a productive year for the Commercial Fraud Committee. Our committee published two newsletters, containing six articles, and a third newsletter is currently in the works. A webinar is also planned for 2020. Here are a few highlights of our committee’s activities in 2019, as well as our upcoming plans for the new year:

Post date: Monday, November 25, 2019

As a Certified Public Accountant (CPA) who began his career as an auditor, I thought at the time that I stepped into the world of financial forensics I was prepared to embark on a career as a financial fraud auditor and expert. After all, numbers are numbers; they don’t lie or misrepresent themselves. Or so I thought.


Tue, 2020-01-14

The webinar panel, comprised of bankruptcy lawyers, a panel bankruptcy trustee and a financial advisor, will delve into what occurs when an individual debtor files bankruptcy and fails to properly disclose their assets.

Sat, 2017-12-02

Hosted by the Bankruptcy Litigation and Commercial Fraud Committees. This panel will explore whether and how far U.S. avoidance provisions might apply extraterritorially, and will discuss the challenges and pitfalls of alternate theories of recovery.

Wed, 2017-11-15

This webinar will focus on the criminal bankruptcy fraud provisions of Title 28. The presentation will use examples from well-known bankruptcy fraud cases to illustrate how these laws play out in practice. The presentation will also touch on other criminal statutes (e.g., mail and wire fraud) that are frequently implicated in bankruptcy fraud cases.

Tue, 2017-06-06

In Janvey v. Golf Channel, Inc., No. 13-11305 (5th Cir. Aug. 22, 2016), arising from the SEC enforcement action against Stanford International Bank, Ltd., pending in the U.S. District Court for the N.D. Tex., the U.S. Court of Appeals for the Fifth Circuit addressed the issue of whether trade creditors who fully perform in the ordinary course at market rates provide reasonably equivalent value to a Ponzi scheme, under the Bankruptcy Code and fraudulent transfer law in Texas (and beyond).

Fri, 2017-04-21

This panel hosted by the Commercial Fraud and Secured Credit Committee will take a fresh look at secured creditor rights and unique solvency issues in fraud and Ponzi cases. Learn how to avoid being trumped in federal forfeiture proceedings or paying on bankruptcy clawback claims by treading in the safe harbor of § 546(e) — and learn how to navigate the shoals of receivership. 

Tue, 2016-11-29

The topic of the most recent Commercial Fraud Committee call, discussed the Uniform Voidable Transactions Act (UVTA), formerly named the Uniform Fraudulent Transfer Act (UFTA), which was amended (and retitled) in 2014 for the first time since its creation in 1984.  According to the Uniform Law Commission, the amended Act, which strengthens creditor protections by providing remedies for certain transactions by a debtor that are unfair to the debtor’s creditors, addresses a small number of narrowly-defined issues and is not a comprehensive revision of the Act.

Mon, 2016-09-19

Guest speaker, James Lodoen, Esq., a partner at Linquist & Vennum, PLLP in Minneapolis, discusses Finn v. Alliance Bank (S. Ct. Minn. 2015), Kelley v. Opportunity Finance, LLC, et al. (In re Petters Company, Inc., et al.) (Bankr. D. Minn. May 31, 2016), and the Ponzi-scheme presumption.

Tue, 2016-05-31

The Commission recommended that section 550 be amended to permit the trustee to name an alleged subsequent transferee as a defendant in the original complaint to avoid any transfer under Bankruptcy Code sections 544, 545, 547, 548, 549, or 553(b), and to recover such property under section 550, rather than filing an avoidance action prior to filing a recovery action, as the Code currently requires.

Fri, 2016-04-15

People and Assets on the Move Overseas: What You Need to Know to Hold Everything Still and Seize the Assets

Tue, 2016-01-19

The Chapter 11 Commission Report recommended that the burden of proof for appointing a Chapter 11 Trustee under 1104(a) be changed from clear and convincing evidence to a preponderance of the evidence. The Commissioners determined that the existing more stringent standard has a chilling effect on parties-in-interest seeking the appointment of a Trustee, that the benefits of having a Trustee in appropriate cases outweigh the risks of abuse and unnecessary distractions that a lower standard could bring, and that adopting a preponderance of the evidence standard would resolve a split among the courts on this issue.


Ms. Melissa Davis, CPA, CIRA, CFE
KapilaMukamal, LLP
Fort Lauderdale, FL
(954) 761-1011

Ms. Virginia Tate, CFE/CIRA/EA
FAI International, Forensic Accounting & Investigations
Coeur D Alene, ID
(208) 765-5432

Mr. Ben A. Barnes
Communications Manager
Reid Collins & Tsai LLP
Dallas, Tx
(214) 420-8913

Mr. Walter F. McArdle, Esq.
Education Director
Spain & Gillon, LLC
Birmingham, AL
(205) 581-6295

Mr. Michael D. Napoli
Newsletter Editor
Akerman LLP
Dallas, TX
(214) 720-4300

Mr. Adam D. Crane
Special Projects Leader
HSM Chambers
George Town, Grand Cayman,
(345) 815-7364

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