Because a trustee suing to recover a fraudulent transfer is acting in the interest of creditors, not the debtor, the in pari delicto defense does not apply, says Bankruptcy Judge Scott Clarkson.
Affirming Bankruptcy Judge Michael Romero, the district court holds that an exemption remains valid even though the exempt property remains subject to a nondischargeable domestic support obligation.
In an 8-1 opinion, the Supreme Court holds that the waiver of sovereign immunity under Section 106(a) does not extend to suits brought by a trustee under state law standing in the shoes of an actual creditor.
In New Jersey, a trustee’s hypothetical judicial lien has priority over a judgment lien if the judgment lienholder has not made a levy on the property.
