Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Third Circuit Orders Unwinding of Transaction Involving Transfers Which Passed Through Multiple Related Parties
Although not always straightforward or consistent, federal and state laws regarding the recovery of fraudulent conveyances are well developed. However, when the transaction flows through several transferees, the analysis can quickly become complicated. In a recent decision, the U.S. Court of Appeals for the Third Circuit employed such an analysis and ordered the unwinding of a transaction involving transfers which passed through multiple related parties. See, Kartzman v. Latoc (In re the Mall at the Galaxy), Case No. 23-1906 (3rd Cir. Aug. 7, 2024). This nonprecedential decision presents interesting facts arising from a loan essentially among "friends" and their businesses. The appeal itself arose out of a bankruptcy court decision involving the Mall at the Galaxy, Inc. The mall had incurred liabilities related to a $2 million loan made by a real estate company (Latoc) to a group of rubber recycling companies (the "PermaLife" entities). Despite its insolvency at the time, the mall repaid Latoc $592,875.03 before entering bankruptcy.
The trustee of the mall's Chapter 7 estate filed a complaint seeking to avoid these loan payments as a fraudulent transfer under 11 U.S.C. Sections 548(a)(1)(B) and 544(b)(1). The Bankruptcy Court and the district court both found that the mall did not receive reasonably equivalent value in exchange for the $2 million loan from Latoc, and that the transfers among Latoc, the mall, and PermaLife should be collapsed and construed as a single, integrated transaction. The Third Circuit ultimately affirmed the lower court decision.
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
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.
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office
A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.
Bit Parts
Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights
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.