Chapter 7 liquidating trustee failed to state a claim to recover assets transferred by debtor on the basis of a fraudulent transfer where the asset had been transferred as pre-petition sale in exchange for promise of preferred stock in the purchaser to be issued in six months. Consequently the complaint did not plead a fraudulent transfer but rather a claim for breach of contract despite the purchaser’s failure to eventually issue the stock and the purchaser’s subsequent fraudulent transfer of its assets to third-parties. Moreover liquidating trustee’s claim that the asset sold by had been converted pre-petition by purchaser, that title therefore remained with the trustee and defendants were therefore liable for conversion of the assets, was dismissed. Complaint failed to state a fiduciary relation between debtor and the purchasers that would give rise to a conversion claim on behalf of the debtor.Download PDF In re Stillwater Asset Backed Offshore Fund, Ltd.
In re Stillwater Asset Backed Offshore Fund, Ltd.
Greentree Servicing, LLC v. Feller
Trial court denied motion to amend foreclosure complaint to assert equitable subrogation claim against the fee interest of the borrower’s spouse. Third Department reversed and granted leave to amend the complaint, holding that use of husband’s loan proceeds to satisfy prior mortgage of the husband and wife against marital residence stated a recognized claim of equitable subrogation and amendment should have been granted despite spouse’s claim she explicitly refused to sign the note and mortgage being foreclosed.
In re Stillwater Asset Backed Offshore Fund,Ltd.
The firm successfully represented grantee at tax foreclosure sale against motion by Chapter 7 liquidating trustee to vacate deed as violative of the automatic stay. Chapter 7 trustee claimed the property had been fraudulently transferred to a third-party prior to the petition date. Since the trustee had not actually recovered the property on behalf of the debtor as of the petition date, the property was not then part of the debtor’s estate. Consequently the automatic stay effective as of the petition date did not stay the tax foreclosure sale occurring after the petition date. Moreover, since the tax foreclosure was not an action to recover a debt against the debtor, the sale was not stayed.Download PDF In re Stillwater Asset Backed Offshore Fund,Ltd.