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Full-Text Articles in Estates and Trusts
Third-Party Releases Under The Bankruptcy Code After Purdue Pharma, Jeanne L. Schroeder, David G. Carlson
Third-Party Releases Under The Bankruptcy Code After Purdue Pharma, Jeanne L. Schroeder, David G. Carlson
Articles
The biggest bankruptcy case ever (as measured by unsecured claims against a debtor-in-possession) is In re Purdue Pharma, LLC. The bankruptcy court affirmed a plan discharging the Sackler family (equity owners and often officers of Purdue) of all “derivative” claims that belonged to the debtor-in-possession. The settlement was bought for a substantial sum payable over time by the Sacklers. A debtor-in-possession is the sole owner of a derivative claim and has the power to bind all the creditors to a settlement. Under the Bankruptcy Code, a plan discharging derivative claims is confirmable. In fact, as we will, show, a great …
Fraudulent Transfers: Void And Voidable, David G. Carlson
Fraudulent Transfers: Void And Voidable, David G. Carlson
Articles
This Article explores the civil procedure attendant to private fraudulent transfer litigation (primarily outside the context of bankruptcy). In such litigation, courts ponder whether fraudulent transfers are void or voidable. In fact, they are both simultaneously! According to the theory "at law," a fraudulent transfer is "void." That is, a creditor with a judgment could simply levy the property from a fraudulent grantee as if the grantee had no property rights. This Article questions the constitutional viability of this ancient attitude. Meanwhile, "equity" viewed the transfer as voidable. The grantee gets title, but the title might be set aside. The …
Giving Back A Fraudulent Transfer: A Defense To Liability?, David G. Carlson
Giving Back A Fraudulent Transfer: A Defense To Liability?, David G. Carlson
Articles
In Whitlock v. Lowe (In re Deberry) (5th Cir. 2019), the Fifth Circuit court of appeals found it obvious that if a transferee gives back fraudulently transferred funds (which the debtor then dissipates), the transferee has a complete defense to liability to the transferor’s bankruptcy trustee. This puts the Fifth Circuit at odds with the Sixth and Seventh Circuits, where the prepetition give-back counted as no defense. This article concludes that a more nuanced position should mediate between these extremes, based on an “innocent donee” defense retrieved from Nineteenth Century precedent. The article emphasizes that if bad faith transferees for …
The Myth Of Testamentary Freedom, Melanie B. Leslie