Gugino v. Greater Rome Bank (In re Payroll America, Inc.)

Ninth Circuit Court of Appeals Case No. 13-35903 (July 9, 2015) (Not for Publication)
Trustee failed to demonstrate a fraudulent transfer where Defendant bank had no dominion over the money transferred from Debtor and was therefore not an initial transferee; bank was not an entity for whose benefit the transfers were made; and bank was not a subsequent transferee.
Procedural context:
Bankruptcy court grants summary judgment. District court affirms. Appeal to the Ninth Circuit.
The transfers at issue were payments from Debtor into the bank account of a processing service company. Pursuant to an agreement between Defendant bank and the processing service company, the bank was allowed to deduct certain losses (described as "cure wires") from the processing service company's account. The processing company then had the right to be reimbursed from Debtor.
NGUYEN and FRIEDLAND, Circuit Judges and CARNEY District Judge sitting by designation.

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