- 11 U.S.C.
Feldman v. Chase Home Finance (In re Image Masters Inc.)
Dec
17
2009
Ruling
Transfers by debtor that operated Ponzi scheme to mortgage lender that was ignorant of scheme were not avoidable on grounds of actual or constructive fraud.
Procedural posture
Chapter 7 trustee brought claims to avoid over $ 23 million of transfers made to defendants, residential mortgage lenders. The transfers were underlying mortgage payments made by the debtors, the facilitators of a multi-million dollar Ponzi scheme. The lenders moved to dismiss all counts of the complaint for failure to join parties under Fed. R. Civ. P. 12(b)(7) and 19, and the avoidance claims under Fed. R. Civ. P. 12(b)(6).
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Court
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