Recent Posts

The Victim Balancing Act in the Petters Ponzi Scheme Case Continues
Posted on 10 Jul 2013 by Kathy Bazoian Phelps

The unique circumstances of Ponzi schemes require careful consideration to mete out justice in unwinding them and in redressing the injuries to defrauded victims. Investors who got out early were often paid back in full, plus some. Other investors who... Read More

New Florida Law May Protect Charities Against Ponzi Scheme Clawback Claims
Posted on 18 Jun 2013 by Kathy Bazoian Phelps

Last Friday, Florida Governor Rick Scott signed HB 95. This bill amends § 726.109 of the Florida Statutes by adding this broad defense to a claim to avoid a charitable contribution as a fraudulent transfer: "The transfer of a charitable... Read More

Stockbroker Safe Harbor Defense in Ponzi Schemes Remains Unresolved Following Picard v. Katz Settlement
Posted on 21 Mar 2012 by Kathy Bazoian Phelps

The stockbroker defense in § 546(e) of the Bankruptcy Code creates a safe harbor for recipients of certain types of transfers and can bar fraudulent transfer claims brought by a trustee. In Picard v. Katz , this was a $1 billion issue, and one... Read More

No More Ugly American: Judge Refuses to Allow Madoff Trustee to Pursue Foreign Indirect Investors
Posted on 23 Jul 2014 by Kelley Drye & Warren LLP

by Ben Feder Judge Jed S. Rakoff of the Southern District of New York last week ruled that the U.S. Bankruptcy Code does not permit a bankruptcy trustee to recover foreign transfers [ an enhanced version of this opinion is available to subscribers... Read More

Fifth Circuit Narrows Fraud Dischargeability Claims
Posted on 29 May 2015 by Stephen Sather

Rejecting a Seventh Circuit precedent, the Fifth Circuit has ruled that a non-dischargeability claim under section 523(a)(2)(A) must be based upon a false representation. While bad conduct that does not involve a misrepresentation may be actionable under... Read More

Bidders Reimbursed For Auction Which Never Occurred: The Fifth Circuit's ASARCO Opinion
Posted on 25 Aug 2011 by Stephen Sather

The Fifth Circuit has ruled that, under the facts of the specific case, that bidders could recover their costs without a showing of direct benefit to the estate. Matter of ASARCO LLC , No. 10-40930 (5th Cir. 8/16/11). The specific holding was that... Read More

Five Weeks Until Pitchers and Catchers Report, Eight Weeks Until Lawyers Report - Madoff Judge Confirms Mid-March Trial For Trustee's Claims Against Mets' Owners
Posted on 19 Jan 2012 by Kelley Drye & Warren LLP

Judge Jed S. Rakoff this week denied the request of Irving Picard, the trustee of Bernard L. Madoff Investment Securities LLC ("BLMIS") , to pursue an immediate appeal of Judge Rakoff's recent decision to dismiss most of the counts set forth... Read More

Clawback Claims - HB Litigation Conference Video Excerpt: Madoff Litigation Conference, Feb. 25, New York
Posted on 16 Mar 2009 by HB Litigation Conferences

Philip Bentley of Kramer Levin Naftalis & Frankel LLP, New York, spoke on February 25, 2009 at the Madoff Litigation Conference, conducted by HB Litigation Conferences in New York City. Mr. Bentley discussed the potential impact of the recent ruling... Read More

How Much Control Does a Trustee Have in a Ponzi Scheme Case?
Posted on 21 Jan 2014 by Kathy Bazoian Phelps

Consider three recent events in the Bernard Madoff Ponzi scheme case, which demonstrate a certain unevenness and perhaps even inconsistency in the authority vested in the trustees who are administering these types of cases. Trustees act under the authority... Read More

Wall Street Journal Talks with “The Ponzi Book” Co-Author Kathy Bazoian Phelps about Madoff-NY Mets Settlement
Posted on 20 Mar 2012 by LexisNexis Bankruptcy Law Community Staff

The Wall Street Journal's Bankruptcy Beat blog yesterday featured a conversation with bankruptcy attorney Kathy Bazoian Phelps of Danning, Gill, Diamond & Kollitz, LLP, co-author of the The Ponzi Book: A Legal Resource for Unraveling Ponzi... Read More

Madoff Trustee Agrees To $162M Settlement With New York Mets’ Owners
Posted on 19 Mar 2012 by LexisNexis Bankruptcy Law Community Staff

NEW YORK - (Mealey's) The owners of Major League Baseball's New York Mets and the liquidation trustee of Bernard L. Madoff Investment Securities LLC (BLMIS) agreed on March 19 to a $162 million settlement of claims relating to the defendants'... Read More

U.S. High Court Will Not Hear Bankruptcy Case Dealing with Fraudulent Transfers
Posted on 7 Oct 2013 by James Cordrey

WASHINGTON, D.C. — (Mealey's) The U.S. Supreme Court on Oct. 7 refused to hear a case in which the 10th Circuit U.S. Court of Appeals had affirmed that fraudulently transferred property is not part of a bankruptcy estate until it is recovered... Read More

The Problem with Multiple Accounts in Ponzi Scheme Clawback Actions
Posted on 11 Aug 2014 by Kathy Bazoian Phelps

Can different but related account holders offset losses in one account against gains in another account? Can a husband and wife with separate accounts offset losses in one account against gains in the other? When there is a family trust, can the trustee... Read More

James Higgason Jr. of Andrews Kurth LLP Discusses Fraudulent Transfer Action Claims Against the FDIC in Bank Holding Company Cases
Posted on 11 Feb 2011 by LexisNexis Legal Business Community Staff

On this edition, James D. Higgason Jr., partner in the trial section of the Houston office of Andrews Kurth LLP, discusses his chapter titled Fraudulent Transfer Action Claims Against the FDIC in Bank Holding Company Cases that appears in the Collier... Read More

Fourth Circuit Makes New Fraudulent Transfer Law
Posted on 19 Jun 2013 by Kathy Bazoian Phelps

Determined not to hold a securities brokerage firm liable for fraudulent transfers in a Ponzi scheme case, the Fourth Circuit recently pushed the boundaries of fraudulent transfer law to affirm the lower court's dismissal of the trustee's claims... Read More