TOUSA III: Lenders Beware? Eleventh Circuit Upholds Bankruptcy Court’s Original Fraudulent Transfer Decision
17 May 2012
Mayer Brown Legal Update
In a closely watched appeal, the Eleventh Circuit Court of Appeals reversed the district court and affirmed the bankruptcy court’s original decision in In re TOUSA, Inc., in which it found that various lenders had received hundreds of millions of dollars in fraudulent transfers. Although framed narrowly on the factual findings of the bankruptcy court, the Eleventh Circuit’s decision nonetheless creates greater uncertainty for lenders and other creditors seeking repayment from distressed debtors.