Marital Separation / Divorce and Fraudulent Transfers

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7th Oct 2012

In re Neal, U.S. 6th Circuit Court of Appeals, 11-8081, September 28, 2012

Debtor / wife transferred property to non-filing husband as part of a separation agreement. Chapter 7 Trustee argued that the transfers were fraudulent transfers under 11 U.S.C. 548(a)(1)(B), 544, 550. Husband argued that he would have received the transfers if there had been a contested divorce. The Bankruptcy Court concluded that it was not proper to consider the likely outcome of a contested divorce, that the issue was the comparison of the value that the Debtor received with the value that the Debtor transferred, and that the Debtor did not receive reasonably equivalent value.

Justia summary and Opinion: http://j.st/8xk

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