Tag «6th Circuit»

Ponzi Scheme Trustee Has Standing to Pursue Recovery Claims, and Is Not Barred by in Pari Delicto Doctrine, in Sixth Circuit

Ponzi Scheme Trustee Has Standing to Pursue Recovery Claims, and Is Not Barred by in Pari Delicto Doctrine, in Sixth Circuit, Which Joins Third, Eighth and Eleventh Circuits in Declining to Follow Second Circuit’s Wagoner Rule In 1991, the Second Circuit, in Shearson Lehman Hutton, Inc. v. Wagoner, 944 F.2d 114, 120 (2d Cir. 1991), held …

Objective “Knew or Should Have Known” Standard Applies to Good Faith Defense to Actual Fraudulent Transfer Claim

While a defendant who received transfers from an insolvent or fraudulent enterprise in good faith and for reasonably equivalent value may ultimately defeat an actual fraudulent transfer claim, the plaintiff is not required to negate an anticipated good faith defense in the complaint to adequately state a claim. Such a defense is an affirmative defense …

A Receiver Has Standing to Pursue Fraudulent Transfer Claims on Behalf of Receivership Entity

As set forth in Scholes v. Lehmann and adopted by courts across the country, a Receiver has standing to pursue fraudulent transfer claims because the receivership entity in whose shoes the Receiver stands is deemed to be creditor of the Ponzi scheme or other fraudulent enterprise that was placed in receivership.  That seminal case and its ever-growing progeny …

Stay Relief Is Seldom Granted in Receivership Cases

The Ninth Circuit Court of Appeals, in SEC v. Wencke, 742 F.2d 1230 (9th Cir. 1984), set forth the three factors commonly applied by federal courts in determining whether to lift the stay in a receivership case: (1) whether refusing to lift the stay genuinely preserves the status quo or whether the moving party will …