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Expert Analysis

3rd Circ. Ruling May Shake Up Estate Scope Litigation

Law360, New York ( October 7, 2014, 10:43 AM EDT) -- On Sept. 26, 2014, the United States Court of Appeals for the Third Circuit reversed and remanded a New Jersey federal district court's order deciding that a successfully avoided fraudulent transfer that was subject to a recovery order was not property of the debtor-transferor's estate where the debtor-transferor does not have actual possession of the transferred funds.[1] The Third Circuit rejected this conclusion, holding that where a debtor avoids a fraudulent transfer and obtains an order to that effect, it has sufficiently "recovered" the funds so that they are a part of the debtor's estate....

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