楊清泉律師 - FRAUDULENT TRANSFER NOT DISCHARGEABLE IN BANKRUPTCY PART 1
楊清泉律師事務所
A transfer of property for the purpose of hiding the property from creditors is a fraudulent transfer of property. For example, you are being sued for $500,000 for breach of contract. A month after you are sued, you quitclaim your house to your friend Barack Khan, a direct descendant of Kublai Khan, son of Genghis. Your house has $400,000 of equity. After a year, plaintiff obtains a judgment against you for half a million dollars. To enforce the judgment he puts a lien of $500,000 on your house and attempts to force the sale of your house to satisfy the judgment. You object on the ground that the house you live does not belong to you. As proof, you give plaintiff a copy of the quitclaim to Barack Khan who is in your backyard living in a tent and tending to his horses. Plaintiff then files a motion to annul the quitclaim as a fraudulent transfer of property claiming that the purpose of the transfer was to hinder, hide, and delay or otherwise attempt to place the property out of his reach. You oppose the motion alleging that Barack paid you 400 Mongolian horses worth $1,000 each to pay you for your $400,000 of equity. Who will win?
In Re Jennings, the debtor’s former husband, Bruce, controlled Bryco Arms, Inc., a company that manufactured handguns, and B.L. Jennings Inc., a company that distributed handguns. The appellee, Brandon J. Maxfield, was rendered a quadriplegic when he was accidentally shot by a handgun made by Bryco and distributed by B.L Jennings.
In May 2001, Maxfield sued Bruce Jennings and his two companies for personal injury. In December 2001, Maxfield amended the complaint to add the complaint to add the debtor and RKB Investments as defendants. RKB was a partnership created by Bruce and the debtor. KB was the owner of property known as Shoreview, which was worth $3.9 million.
On May 13, 2003, a jury found the original defendants to be liable for Maxfield’s injury. The jury awarded him $24,774,146.53 in damages. The next day, the original defendants plus the debtor and RKB filed Chapter 11 petitions. The de3btor’s case was subsequently converted to Chapter 7.
In Re Jennings, the debtor’s former husband, Bruce, controlled Bryco Arms, Inc., a company that manufactured handguns, and B.L. Jennings Inc., a company that distributed handguns. The appellee, Brandon J. Maxfield, was rendered a quadriplegic when he was accidentally shot by a handgun made by Bryco and distributed by B.L Jennings.
In May 2001, Maxfield sued Bruce Jennings and his two companies for personal injury. In December 2001, Maxfield amended the complaint to add the complaint to add the debtor and RKB Investments as defendants. RKB was a partnership created by Bruce and the debtor. KB was the owner of property known as Shoreview, which was worth $3.9 million.
On May 13, 2003, a jury found the original defendants to be liable for Maxfield’s injury. The jury awarded him $24,774,146.53 in damages. The next day, the original defendants plus the debtor and RKB filed Chapter 11 petitions. The de3btor’s case was subsequently converted to Chapter 7.
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