(6th Cir. Feb. 8, 2017)

The Sixth Circuit reverses in part the bankruptcy court’s judgment in this fraudulent transfer action. The defendant bank received funds as loan payments from an affiliate of the debtor. The affiliate entity was created by the debtor to facilitate a ponzi scheme. The bankruptcy court held that all of the loan payments were recoverable. The Sixth Circuit differentiates between direct loan payments from the affiliate, indirect loan payments resulting from the affiliate depositing into the debtor’s bank account, and excess deposits later withdrawn by the debtor or seized by the government. Opinion below.

Judge: Rogers

Attorneys for Trustee: Mika, Meyers, Beckett & Jones, Douglas Arthur Donnell, Fredric Norman Goldberg

Attorneys for Defendant: Covington & Burling, Robert Allen Long, Jr., Mark William, Mosier, David Meir Zionts, Warner, Norcross & Judd, Jeffrey O. Birkhold, James Moskal, Matthew T. Nelson