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The 2nd U.S. Circuit Court of Appeals decided In re TransCare Corp., No. 21-2547; 21-2576, affirming rulings from the United States District and Bankruptcy Courts for the Southern District of New York, which found that Lynn Tilton—the sole director and indirect owner of TransCare Corp. (the Debtor)—breached her fiduciary duties to the Debtor and caused other entities she directly and indirectly owned and controlled to engage in an actual fraudulent transfer of the Debtor’s assets.
In reaching its decision, the 2nd Circuit joined the 4th, 5th, 8th, and 9th Circuits in holding that a finding of fraudulent intent for purposes of a fraudulent transfer is reviewed for clear error—not de novo.
In this Reuters Legal News article authored by Loeb & Loeb Restructuring and Bankruptcy partners Schuyler Carroll and Bethany Simmons and associate Noah Weingarten, the writers analyze TransCare’s case and how it will likely alter how courts review fraudulent transfer decisions and provide guidance on the “badges of fraud” used to measure whether intent to make an actual fraudulent transfer exists.
In reaching its decision, the 2nd Circuit joined the 4th, 5th, 8th, and 9th Circuits in holding that a finding of fraudulent intent for purposes of a fraudulent transfer is reviewed for clear error—not de novo.
In this Reuters Legal News article authored by Loeb & Loeb Restructuring and Bankruptcy partners Schuyler Carroll and Bethany Simmons and associate Noah Weingarten, the writers analyze TransCare’s case and how it will likely alter how courts review fraudulent transfer decisions and provide guidance on the “badges of fraud” used to measure whether intent to make an actual fraudulent transfer exists.
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