Farrar v. Warda & Yonano, LLP (In re Bella Vista By Paramont, LLC)

Summarized by Richard Corbi , Otterbourg P.C.
12 years 2 months ago

Citation:

Case No. 11-60022, 9th Cir. Dec. 11, 2013 (Not for Publication)

Tag(s):

Ruling:

First, with regards to the preference claim, the Ninth Circuit Court of Appeals affirmed the B.A.P.'s ruling that W&Y was not an insider because there was no indicia of control over Bella Vista to elevate W&Y to insider status. Second, with regards to the fraudulent conveyance claim, the Ninth Circuit Court of Appeals remanded to the lower court with instructions to conduct necessary findings to determine if payments from Bella Vista to W&Y were fraudulent conveyances and determine the precise value of those conveyances. Third, with regards as to whether W&Y was an initial transferee under section 550(a)(1) of the Bankruptcy Code, the Ninth Circuit Court of Appeals reversed the B.A.P. and held that W&Y was an initial transferee and that W&Y did not advance a credible argument that it was not an initial transferee.

Procedural context:

The Ninth Circuit Court of Appeals AFFIRMED in part and REVERSED and REMANDED in part the decision of the Bankruptcy Appellate Panel for the Ninth Circuirt.

Facts:

Gary Farrar ("Farrar"), the chapter 7 trustee for the bankruptcy of Bella Vista by Paramount, LLC ("Bella Vista") sued Warda & Yonano ("W&Y"), Bella Vista's counsel, to avoid and recover payments made by Bella Vista to W&Y for legal services rendered to Bella Vista. Farrar sued to set aside the payments as preferential transfers under Section 547 and fraudulent conveyances under Section 548 of the Bankruptcy Code. The Bankruptcy Court for the Eastern District of California entered a judgment in favor of Farrar. The Bankruptcy Appellate Panel (the "B.A.P.") reversed.

Judge(s):

Reinhardt, Noonan, Watford

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