- Rund v. Bank of America Corp. (In re EPD Investment Co., LLC), BAP Nos. CC-13-1374-KiKuDa and CC-13-1375-KiKuDa (9th Cir., Jan. 7, 2015)
- REVERSING the order of the bankruptcy court, the BAP held that 11 USC 546 (a) preempts a state-law fraudulent transfer statute of repose, and that the reach back period is established on the petition date, rather than from the complaint.
- Procedural context:
- Trustee appeals orders of the bankruptcy court (C.D. Ca.), which granted Defendants' motions to dismiss Trustee's claims against them for certain fraudulent transfers pursuant to state law, finding that the state statute is a statute of repose, and ruling that the reach back period extends seven years from the complaint, rather than the petition date.
- Trustee, pursuant to 544 (b) and state-law statutes, sought to avoid transfers from Debtors to Defendants occurring up to seven years prior to the petition date. Defendants moved for dismissal, arguing that recovery was time barred. Trustee opposed the motion, arguing that the filing of a bankruptcy petition tolls the limitations period on a creditor's state-law fraudulent transfer action, even if the state's limitation period has expired. Defendants argued that the state-law statute was a statute of repose, and not subject to tolling.
- Kirscher, Kurtz, and Davis
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