Weinman v. Walker (In re Adam Aircraft Indus., Inc.)

Citation:
B.A.P. 10th Cir. (May 15, 2014)
Tag(s):
Ruling:
AFFIRMING the bankruptcy court's order denying a portion of the debtor's preference and fraudulent conveyance claims against the defendant.
Procedural context:
AAI filed a Chapter 7 petition on February 15, 2008. Thereafter, the trustee brought an adversary to recover all funds paid within 1 year of the petition to an insider. The bankruptcy court awarded the trustee $62,500.02 for payments made within 90 days of the petition and denied the remaining claims. The trustee appealed the bankruptcy court's decision.
Facts:
Adam Aircraft Industries ("AAI") filed for a voluntary Chapter 7 bankruptcy petition on February 15, 2008. Prior to that filing on February 1, 2007, Joseph Walker ("Walker"), president and member of AAI's board of directors, was terminated as president from the board of directors. Walker and the business's founder George Adam were surprised at the board decision because they were securing debt financing for AAI at that time. Therefore to avoid disrupting financing terms, it was agreed that Walker resign rather than be terminated. That months that followed, various severance terms were established for Walker. Through various negotiations and discussions, Walker received various payments for his severance within one year of AAI filing for bankruptcy. $62,500.02 was within 90 days immediately prior to the petition date. After the filing, the chapter 7 trustee brought an adversary against Walker to recover all payments made after his termination/resignation.
Judge(s):
Larking, Jacobvitz, and Hall.

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