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Vol 12, Num 1 l January 2016

Technology and Intellectual Property

► In This Issue:

In re Equipment Acquisition Resources, Inc.: Further Clarification Regarding the Defense to Fraudulent Transfers Available Under Section 550(b)(1) of the Bankruptcy Code


James R. Irving
Bingham Greenebaum Doll LLP
Louisville, Ky.

In a recent decision, the United States Court of Appeals for the Seventh Circuit provided further clarification regarding the defenses available to “mediate or immediate transferees” who receive an otherwise avoidable transfer. This decision is particularly valuable to defendants in cases where an insider of a company fraudulently looted that company in order to pay the insider’s personal debts.

In Equipment Acquisition, the Court of Appeals upheld a lower court’s decision granting summary judgment in favor of a casino which had allegedly received a fraudulent transfer. In that case, Horseshoe Hammond, LLC (“Horseshoe”) received $8,248,000 in transfers from two individuals, Sheldon Player and his wife Donna Malone, in satisfaction of the couple’s gambling debts.
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Chasing Fraudsters in Canada - A Very Brief Primer


Frank Spizzirri
Baker & McKenzie LLP
Toronto, Ontario

Chasing fraudsters is never easy. They always appear to be one step ahead and creditors, in addition to having to prove the fraudulent transaction, have to also find the money or assets and be able to recover them. Chasing fraudsters or assets into another country just adds one more hurdle (and potentially more) to recovery for clients. Thus, understanding the legal system across the border before undertaking any recovery steps becomes that much more important to legal advisors. The Canadian legal system offers creditors a number of recovery tools, the more useful of which are discussed in this brief primer.
 » Read More

Lyondell Decision in SDNY Reminds Fraudulent Transfer Plaintiffs of the Heightened Pleading Standard for Actual Fraudulent Transfer Claims


Jason M. Torf
Horwood Marcus & Berk Chtd.
Chicago, Ill.

Fraudulent transfer plaintiffs be reminded: the heightened pleading standard in Rule 9(b) continues to create difficulty surviving a motion to dismiss actual fraudulent transfer claims. In In re Lyondell Chem. Co, in the context of fraudulent transfer litigation following a leveraged buyout, the United States Bankruptcy Court for the Southern District of New York reaffirmed that the Rule 9(b) heightened pleading standard applies to actual fraudulent transfer claims, dismissing them in the absence of very specific pleading of the defendants’ actual intent to hinder, delay or defraud. On the other hand, the bankruptcy court confirmed that the more rigorous pleading standard does not apply to constructive fraudulent transfer claims and allowed those claims to survive the pleading stage.
» Read More

member price* $95
non-member price $115

Available from the ABI Bookstore—Fraud & Forensics: Piercing Through the Deception in a Commercial Fraud Case

Fraud & Forensics: Piercing Through the Deception in a Commercial Fraud Case highlights the areas of specialty, challenge, and reward for forensic accountants and the professionals who work with them in commercial fraud cases, and provides a broad and deep look at challenges faced in the course of a commercial fraud matter, as well as the tools available to help identify, unwind, and prove fraudulent transactions.

*Be sure you are logged into the ABI website to obtain the member price.

Access Committee Webinars Online:

The Commercial Fraud Committee began hosting a series of webinars in fall of 2015. The first webinar took place on October 8, 2015, and was titled Fraud and Forensics: The Investigation Phase of a Commercial Fraud Case. Speakers for the webinar included Maryellen Sebold, Katya Hirose, and Greg Hays. The second webinar, Fraud and Forensics: The Expert Witness, took place on December 9, 2015, in which Hon. Steven Rhodes (Ret.) and Melissa Kibler presented. Both webinars were moderated by committee Co-chair, Kathy Phelps. All speakers are contributing authors of the committee's publication, Fraud & Forensics: Piercing Through the Deception in a Commercial Fraud Case.

The last webinar in the series is being finalized for the end of January - look out for your invitation to join the committee!

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