Section 548 of the Bankruptcy Code allows a trustee in bankruptcy to avoid certain "fraudulent transfers" of the debtor’s property if they occurred within two years before the date of the bankruptcy filing. InIndustrial Enterprises of America Inc. v. Burtis , Bankruptcy Court Judge Brendan Shannon answers the question, "May § 548′s two-year ‘look back’ period be equitably tolled, allowing transfers that occurred outside of that window to be avoided under § 548?" The court holds that it cannot, and in the process rejects case law to the contrary not only from other jurisdictions but also from Shannon’s own prior inconsistent decisions.
The facts of the case were not complicated. Almost two years after Industrial Enterprises of America Inc. filed for Chapter 11, it filed an adversary proceeding against defendants Susan and Matthew Collyer asserting state-law claims as well as claims under Sections 544, 548 and 550 of the Bankruptcy Code to recover property allegedly transferred from the company to the defendants in the years before its bankruptcy.
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