(6th Cir. Aug. 23, 2016)

The Sixth Circuit reverses the dismissal of certain of the trustee’s claims against the defendant entity alleged to have assisted the debtor with a Ponzi scheme. The debtor financial services company had been purchased by two individuals in 2002 and was transformed into a front for the Ponzi scheme. The scheme collapsed in 2009, an involuntary petition was filed against the Debtor, and the trustee brought claims including fraudulent transfer claims against the defendant. The lower court dismissed all claims, but the Sixth Circuit, interpreting Ohio state law, holds that the trustee adequately pled certain claims that should not have been dismissed. Opinion below.

Judge: Davis

Attorneys for Appellant: Baker & Hostetler, Daniel R. Warren, Thomas D. Warren, Joseph F. Hutchinson, David F. Proaño

Attorneys for Appellee: Gibson, Dunn & Crutcher LLP, Mitchell A. Karlan; Bricker & Eckler LLP, James P. Schuck, Kenneth C. Johnson, Quintin F. Lindsmith

2016-08-23 – in re fair finance company