In the Matter of WallDesign

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The Ninth Circuit affirmed the district court's reversal of the bankruptcy court's grant of summary judgments for defendants in two adversary proceedings seeking recovery of fraudulent transfers. The panel applied the dominion test and held that defendants were initial transferees under 11 U.S.C. 550(a)(1) and thus not entitled to the safe harbor under section 550(b)(1) for subsequent transferees. Therefore, the Committee could recover the funds from both the corporate cheat and those parties to whom he first made payments from the corporate account. The panel remanded for further proceedings. View "In the Matter of WallDesign" on Justia Law