Ivey v. First Citizens Bank & Trust Co. (In re Whitley)
A bank deposit is only a substitution, not a transfer of property, circuit holds.
- Rochelle Quick Take
View Rochelle Summary- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 15-2209 (4th Circuit, Jan 31,2017) Published
- Tag(s):
- Ruling:
- Wire transfers by debtor into his unrestricted checking account were not transfers, as that term is defined in section 101(54), and therefore could not be avoidable transfers under section 548(a). Because the transactions were not transfers, the court did not reach the issue of whether transfers must diminish the bankruptcy estate to be an avoidable transfer.
- Procedural context:
- On appeal from an order of the United States District Court for the Middle District of North Carolina affirming the order granting summary judgment for the Appellee by the United States Bankruptcy Court for the Middle District of North Carolina.
- Facts:
- The case arises out of the involuntary chapter 7 case of James Edwards Whitley, which stemmed from a Ponzi scheme run by the debtor, for which he was convicted of wire fraud and money laundering. The Chapter 7 Trustee filed an adversary complaint to avoid certain deposits and wire transfers made by Whitley into his unrestricted checking account at First Citizens Bank and Trust Company ("FCB") on the theory that the transfers from "investors" were made with actual intent to hinder, delay, or defraud creditors under section 548(a)(1)(A). The bankruptcy court granted summary judgment to FCB on the grounds that the transactions, while transfers, did not diminish the bankruptcy estate and were not avoidable as fraudulent transfers. The District Court affirmed on the same grounds.
- Judge(s):
- Gregory, Wynn, Davis