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Accepting a Fraudulent Transfer Creates Sufficient Contact with a Forum to Establish Jurisdiction

Montoya v. Akbari-Shahmirzadi (In re Akbari-Shahmirzadi), Nos. 11-15351-t11, 13-01035-t, 2016 Bankr. LEXIS 3957 (U.S. Bankr. D.N.M. Nov. 14, 2016)

Defendant Nancy Akbari Shahmirzadi was also the Debtor in this case. Within thirty days of her appointment as the administrator of her deceased mother’s probate estate, the Debtor distributed over $4 million of the estate’s assets to herself and her brother. The Debtor also wrote several checks from her Morgan Stanley account in the United States, payable to herself and her husband. They deposited the checks in their Swiss bank account. The Debtor and her husband also transferred monies from their Swiss bank account to various friends and family. At issue was the transfer of $250,000 check by the Debtor and her husband to the Defendant, AL Dokhan on the instructions of the Defendant Mahmood Akbari-Shahmirzadi. The Trustee alleged that the transfer of $250,000 was fraudulent because it was done with actual intent to hinder, delay, or defraud creditors while the Debtor was insolvent, and for inadequate consideration. The Defendant filed a motion for lack of personal jurisdiction as the Defendant Al Dokhan was based out of Dubai.

The Court stated that to determine the applicability of the personal jurisdiction of a federal court; the relevant inquiry is whether a foreign defendant has had sufficient minimum contacts with the United States or not. The Court relied upon the factors in In Newsome v. Gallacher – (1) whether the defendant purposefully directed its activities at residents of the forum state; (2) whether the plaintiff’s injury arose from those purposefully directed activities; and (3) whether exercising jurisdiction would offend traditional notions of fair play and substantial justice. The Court determined that all three factors were met to satisfy sufficient minimum contact requirement. Al Dokhan intentionally accepted $250,000, which was traceable to the Debtor’s Swiss bank account. The transfer was to hurt the Debtor’s creditors and was expressly aimed by the recipient and the transferor at the forum jurisdiction (the United States). The brunt of the wrongful conduct by the transferor and the transferee would undoubtedly be felt in the forum jurisdiction and in particular by the Debtor’s creditors. Given the relatively narrow range of issues presented by the Trustee’s claim and the alleged connections between Al Dokhan and the Debtor, the Court ruled that exercising jurisdiction over Al Dokhan would not offend traditional notions of fair play and justice. The Court held that the Trustee made a prima facie showing that the Court had specific jurisdiction over Al Dokhan to hear the fraudulent transfer claim.


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