If state law prohibits assertion of the homestead exemption in tax foreclosure and the debtor can’t take federal exemptions, does the debtor lack standing to set aside a fraudulent transfer?
When creditors have been paid in full, a trustee may pursue fraudulent transfers for the benefit of defrauded equity holders, Bankruptcy Judge Craig Goldblatt says.
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.
