The current economic downturn began in 2008 with a wave of frequent Chapter 11 filings that continued until last year. In light of the two-year limitations period (commencing on the filing date) under 11 U.S.C. §546(a), it is not surprising that this wave of case filings has been followed by a wave of avoidance actions. As these cases proceed before our bankruptcy judges, the limits of a trustee’s avoidance powers are becoming more defined.
In a decision inIndustrial Enterprises of America Inc. v. Burtis (In re Pitt Penn Holding Inc .), No. 09-11475, Adv. No. 11-51868 (Bankr. D. Del. Jan. 24, 2012), Judge Brendan L. Shannon held that the two-year period set forth in 11 U.S.C. §548(a) is not a statute of limitations. Instead, it is a substantive element of a fraudulent conveyance action. As a result, this period is not subject to equitable tolling.
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