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The defendant “was a ‘mere conduit’ of [a] fraudulent transfer and cannot be liable to the bankruptcy estate for funds she never knew about,” held the U.S. Court of Appeals for the Second Circuit on May 5, 2022. In re BICOM N.Y., LLC, 2022 WL 1419997 (2d Cir. May 5, 2022). Affirming the lower courts’ granting of summary judgement to the defendant transferee, the court refused to “equate … mere receipt [of corporate debtor funds] with liability,” reasoning that “mere conduits” of fraudulent transfers are not “initial transferees” under Bankruptcy Code §550(a)(1) (“trustee may recover” fraudulently transferred property from “the initial transferee of such transfer”).
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Supreme Court Finds 2017 Bankruptcy Fee Increases Unconstitutional But Leaves Remedy Unclear
By Theresa A. Driscoll
The Supreme Court concluded that because the 2017 amendments exempted debtors located in two States, it was not “uniform” as it did not apply equally to all debtors regardless of where they were situated and, therefore, the statute was unconstitutional.
It May Not Be Too Late to Assume That Lease
By Paul A. Rubin and Hanh V. Huynh
Given the potentially harsh consequence of failing to timely assume a vital lease, a Chapter 11 debtor must be vigilant to avoid a forfeiture. It is important to know, however, that all might not be lost even if the debtor misses this deadline.
Court-Based Student Loan Management Programs Can Facilitate Repayment of Debt Under Chapter 13
By Igor Roitburg and Scott F. Waterman
While bankruptcy traditionally has been seen as a challenging pathway for debtors with student loans, court-based student loan management programs have been adopted to facilitate the repayment and resolution of student loan debt within the Chapter 13 bankruptcy process.
Third Circuit Rejects Side-Switching Disqualification Claim
By Michael L. Cook
Conflicts of interest among clients are a chronic problem for law firms with many clients. How law firms address the problem — and they must — is what the Boy Scouts of America decision shows.
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