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Courts are divided as to whether rule 9(b)’s heightened pleading standard applies to fraudulent-transfer claims. Normally, a complaint under the federal rules must only contain “a short and plain statement of the claim showing that the pleader is entitled to relief….”[1] But sometimes, stricter standards apply. “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”[2]
If you can look into the seeds of time,
And say which grain will grow and which will not,
Speak then unto me, who neither beg nor fear
Your favors nor your hate.
—William Shakespeare Macbeth, Act I, Scene 3
A common exception to the discharge of a debt is that the debtor obtained credit by use of a false financial statement.[1] The Fifth Circuit recently examined this exception and provided important insight into what it means for a creditor to reasonably rely on a debtor’s statement as required by § 523(a)(2)(B).
The webinar panel, comprised of bankruptcy lawyers, a panel bankruptcy trustee and a financial advisor, will delve into what occurs when an individual debtor files bankruptcy and fails to properly disclose their assets. The discussion will include methods of investigating and discovering hidden assets and the means by which a trustee can successfully recover the assets for the bankruptcy estate. The panel will also address defenses that a debtor may raise, including exemptions, tenants by the entirety, or business assets transferred to trusts.
It has been a productive year for the Commercial Fraud Committee. Our committee published two newsletters, containing six articles, and a third newsletter is currently in the works. A webinar is also planned for 2020. Here are a few highlights of our committee’s activities in 2019, as well as our upcoming plans for the new year:
Committee Panel and Networking Event at the 2019 Annual Spring Meeting
As a Certified Public Accountant (CPA) who began his career as an auditor, I thought at the time that I stepped into the world of financial forensics I was prepared to embark on a career as a financial fraud auditor and expert. After all, numbers are numbers; they don’t lie or misrepresent themselves. Or so I thought.
Texas, like nearly every other state, has adopted its own version of the Uniform Fraudulent Transfer Act (UFTA).[1] The UFTA is aimed at preventing “debtors from transferring their property in bad faith before creditors can reach it.”[2] To that end, the Texas UFTA (TUFTA) renders transfers made “with actual intent to hinder, delay, or defraud any creditor of the debtor” voidable[3].
New York is home to many great things, such as Broadway, museums, fashion, and some of the nation’s tallest buildings.[2] Just like some of its highest buildings, New York is also home to some of the country’s highest rent prices. As of April 2019, the average monthly rent for an apartment in New York City was $3,519.[3] However, many apartments are subject to rent-stabilization and rent-control. This means that the landlord is limited in the amount of rent that can be charged for the apartment.
With the continued expansion of international trade and the increase in cross-border transactions comes an increase in complex multi-jurisdictional disputes. And when foreign litigants or related parties have engaged in business dealings in the U.S., it is often necessary for foreign litigants to seek the assistance of courts in the U.S., with one of the key courses of action being an application for discovery under 28 U.S.C. § 1782.[1]
