The Seventh Circuit adopted a broad reading of the Section 546(e) safe harbor to dismiss a fraudulent transfer suit attacking a sale of nonpublic securities.
By referring to the Rooker-Feldman doctrine, the appellant might have won an appeal where the bankruptcy court effectively set aside an erroneous decision by a state court regarding discharge.
Chicago Bankruptcy Judge David Cleary followed a decision by then-district Judge David Hamilton and “respectfully” disagreed with decisions by two predecessors on the same bankruptcy bench.
When there is a recorded option to purchase real estate, Prof. Westbrook would have analyzed the specific performance rights of the holder of the option under state law, not the question of whether the option was executory.
Just because the debtor orchestrated a fraudulent transfer, the Seventh Circuit tells us there’s nothing for a trustee recover if there was no diminution of the estate.
Although a stock purchase and a loan payoff were one month apart, a district judge in Indiana found a sufficient nexus to invoke the safe harbor and dismiss a fraudulent transfer suit.