X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Barry M. Klayman and Mark E. Felger Barry M. Klayman and Mark E. Felger

In Jalbert v. Flanagan (In re F-Squared Investment Management), Adv. No. 17-50738-LSS (Bankr. D. Del. May 7, 2019), the trustee of a liquidating trust sought to avoid bonus payments by the debtors as fraudulent conveyances. Defendants moved to dismiss the fraudulent conveyance counts on the single ground that the trustee had failed to sufficiently plead lack of reasonably equivalent value, because the sole allegations in the complaints regarding value were that the bonuses were discretionary. The trustee argued that, as a matter of law, the payment of a discretionary bonus not tied to a previously enunciated metric was a per se fraudulent conveyance if made while the debtors were insolvent. In rejecting the trustee’s argument, U.S. Bankruptcy Judge Laurie Silverstein of the District of Delaware held that whether the payment conferred value on the debtors was a factual question, and since the trustee did not intend to offer any further evidence in support of his claims, the motions to dismiss should be granted.

This premium content is locked for
Delaware Business Court Insider subscribers only.

*May exclude premium content
Already have an account?
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to groupsales@alm.com to learn more.

Reorganizations Under Chapter 11 of the Bankruptcy CodeBook

Reorganizations Under Chapter 11 of the Bankruptcy Code is the most complete and up-to-date one-volume treatment of this important business-planning tool.
Get More Information

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.