Why Can’t I Pursue My Fraudulent Transfer Action After the Debtor Files Bankruptcy (and Other Interesting Tidbits)

Corporate restructuring team co-leader James Millar authored an article for the New York Law Journal titled “Why Can’t I Pursue My Fraudulent Transfer Action After the Debtor Files Bankruptcy (and Other Interesting Tidbits).” The article addresses why a creditor can’t pursue its state law fraudulent transfer rights against a non-debtor, and how the underlying reasoning for this proposition is subject to some disagreement.

Millar details decisions from the Courts of Appeals that have addressed this question and explains how different courts’ analyses can impact other issues. For example, Millar notes that the contrary parts of the analyses impact the breadth of the concept of ‘property of the estate’ and the attendant application of the automatic stay in various context.

“We can’t necessarily fix every incongruity in the analysis, but we should understand them so that incongruities can be scrutinized when more difficult issues arise,” highlights Millar.