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Whether Funds Transferred From Trust Account Can Be “Property Of The Debtor” That Is Subject To A Fraudulent Transfer Claim, Adam C.B. Lanza
Whether Funds Transferred From Trust Account Can Be “Property Of The Debtor” That Is Subject To A Fraudulent Transfer Claim, Adam C.B. Lanza
Bankruptcy Research Library
(Excerpt)
One of the main purposes of bankruptcy is to maximize the value of the bankruptcy estate for the benefit of creditors. Consistent with this goal of maximizing the value of a bankrupt estate, a bankruptcy trustee has certain “avoidance powers” that are codified in chapter 5 of the Bankruptcy Code. These broad powers allow the trustee to file adversary proceedings to avoid certain pre- and post-petition transfers of property of the debtor. After a trustee avoids a transfer, the “transferred property is returned to the estate for the benefit of all persons who have presented valid claims.”
One common …