Legal Question in Bankruptcy in Ohio

Re: Re: Order by court

Yes, if there has been an adversary proceeding properly brought, under the doctrine of fraudulent conveyance (which applies under state law whcih can be "pulled into" the federal bankruptcy case, or under ordinary federal bankruptcy law, which applies if the transfer occurred within one year before the filing of the bankruptcy.

There are two separate theories: one for "actual intent fraudulent conveyances", where the transfer was made by the debtor (the entity which went bankrupt) with an actual intent to delay, defraud or hinder creditors (usually if this is found by the Court, attorneys' fees will be imposed, too), or "construcitve intent fraudulent conveyances" where the transfer was made for less than fair consideration (usual state law phrase) or reasonably equivalent consideration (federal law phrase) at a time when the debtor was being sued, or at a time that the debtor was insolvent or became insolvent thereby, or a time that the debtor that the debtor was engaged in business and had an unreasonably small capital, or this left the debtor with an unreasonably small captital; or at a time that the debtor did not believe it could pay its remaining debts, or left the debtor in such a situation.

As to actual intent fraudulent conveyances, since people rarely admit actual intent to defraud, and the Court has to figure out whether there was actual intent, the Courts have developed and relied on "badges of fraud" which show actual intent, such as inter-family transactions, especially for no money; etc.

Neil Ackerman 516-228-8245