Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Fifth Circuit Blocks Fraudulent Transferee's Good Faith Defense
"A … transferee [who] received fraudulent transfers with actual knowledge or inquiry notice of fraud or insolvency" loses any "good faith" defense available under the Texas version of the Uniform Fraudulent Transfer Act (TUFTA), held the U.S. Court of Appeals for the Fifth Circuit on Jan. 9, 2019. Janvey v. GMAG, LLC, 2019 WL 141107, 3 (5th Cir. Jan. 9, 2019) (emphasis added).
Although the "TUFTA good faith affirmative defense is an exception to the rule that fraudulent transfers must be returned," the Fifth Circuit reasoned that "no court has considered extending TUFTA good faith to a transferee on inquiry notice who later shows an investigation would have been futile." Id. at 4, 5. Significantly, in reversing the district court's dismissal of an SEC receiver's fraudulent transfer complaint in a Ponzi scheme case, the court "declined to rely on [Bankruptcy Code] §548(c) [case law] to interpret TUFTA good faith." Id., citing G.E. Capital Commercial, Inc. v. Worthington Nat'l Bank, 754 F.3d 297, 312 n.21 (5th Cir. 2014) (Code "§548(c) is not necessarily substantively congruent with state-law counterparts, despite a common ancestry.)".
Relevance
GMAG shows the different judicial approaches to applying fraudulent transfer law under the widely adopted state law Uniform Fraudulent Transfer Act (UFTA) and under the federal Bankruptcy Code (Code). In fact, the Fifth Circuit struggled with differences between the two seemingly identical statutes in 2015 and 2016 after asking for and receiving guidance from the Texas Supreme Court on the meaning of "value" in TUFTA's good faith defense provision.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
New York's Latest Cybersecurity Commitment
On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.