Kapila v. IRS (In re ATM Fin. Servs. LLC)
Mar
01
2011
Ruling
Fraudulent transfer by debtor Ponzi scheme operator to IRS on behalf of second company it owned could not be avoided as IRS was not the initial transferee.
Procedural posture
Plaintiff Chapter 7 trustee filed a complaint against defendant, the Internal Revenue Service (IRS), seeking to avoid an alleged fraudulent transfer from a debtor to the IRS pursuant to 11 U.S.C.S. § 548. The trustee filed two motions for partial summary judgment. In response, the IRS filed a cross motion for summary judgment, raising the good faith defense provided to secondary or intermediate transferees under 11 U.S.C.S. § 550(b).
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Court
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