Fifth Circuit Breathes New Life Into € 136 Million Fraudulent Transfer Action Brought by Bankruptcy Litigation Trustee.
March 20, 2012 in Case Summaries
Jeff Levinger was retained to appeal a federal district court’s dismissal of a € 136 million fraudulent transfer action brought by MC Asset Recovery, a bankruptcy litigation trustee of Mirant Corporation, against a group of European lenders. The district court had dismissed the case after deciding that the applicable fraudulent transfer law was supplied by Georgia, which did not allow for the avoidance of the guaranty transaction at issue. On appeal, Levinger persuaded the Fifth Circuit that controlling choice-of-law principles required the application of New York law rather than Georgia law. The Court also rejected the lenders’ argument that MC Asset Recovery lacked standing to sue because the creditors of Mirant purportedly had been paid in full. Based on these rulings, the Fifth Circuit remanded the case to be decided on the merits under the New York fraudulent transfer statute. MC Asset Recovery LLC v. Commerzbank A.G., 675 F.3d 530 (5th Cir. 2012).
Courts: Federal Courts of Appeals
Subject Matter: Procedural and Evidentiary Issues; Bankruptcy