Ralph Janvey v. GMAG, L.L.C.

Having previously made an ‘Erie’ guess finding no good faith defense to a fraudulent transfer, the Fifth Circuit now certifies the issue to the Texas Supreme Court.

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Case Type:
Case Status:
Reversed and Remanded
No. 17-11526, 2019 WL 2240565 (5th Circuit, May 24,2019) Published
Fifth Circuit certified question to Texas Supreme Court: whether UFTA good faith requires a transferee on inquiry notice to conduct an investigation or show such an investigation would have been futile.
Procedural context:
The district court appointed a receiver to recover SIB's assets and distribute them to the scheme's victims. The receiver sued Magness to recover funds under theories of (1) Texas Uniform Fraudulent Transfer Act (TUFTA) fraudulent transfer and (2) unjust enrichment. The district court held that Magness satisfied his good faith defense.
Stanford International Bank (SIB) was engaged in a Ponzi scheme. SIB issued fraudulent certificates of deposit. Magness was one of the largest investors in SIB. In July 2008, Bloomberg reported that the SEC was investigating SIB. In October 2008, Magness received $88.2 million in cash from SIB.
Stewart, Dennis, Willett

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