In re Picard

Case Type:
Case Status:
Reversed and Remanded
No. 17-2992(L), 2019 WL 903978 (2nd Circuit, Feb 25,2019) Published
Neither the presumption against extraterritoriality nor international comity principles bar the trustee of a domestic debtor from recovering property that the debtor transferred to a foreign entity that subsequently transferred it to another foreign entity.
Procedural context:
Trustee alleged that the subsequent transfers from the feeder funds to other foreign investors were fraudulent, and thus avoidable under section 548(a)(1)(A). Invoking section 550(a)(2), the trustee sued the Appellees to recover the property. Following an order of the district court (S.D.N.Y.), the bankruptcy court dismissed the trustee's actions, holding in each that either the presumption against extraterritoriality or international comity principles prevent the trustee from using section 550(a)(2) to recover the property.
Madoff Securities fraudulently transferred billions of dollars to foreign investors, including the feeder funds at issue here. These feeder funds, the initial transferees of that property, subsequently transferred it to other foreign investors, a group that includes the hundreds of Appellees.
Jacobs, Pooler, Wesley

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