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Home Case Studies Defendant Received Transfers in Good Faith and as Per Agreed Terms; Plaintiff Drops Fraudulent Conveyance Charges

Defendant Received Transfers in Good Faith and as Per Agreed Terms; Plaintiff Drops Fraudulent Conveyance Charges

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Before the bankruptcy, the Debtor dealt with the purchase and administration of life insurance policies held by persons who were thought to be terminally ill. In December 2014, the court ruled that the Debtor’s principal shareholders and officers violated the country’s securities laws.

The Defendant, our client, is a lobbying firm specializing in governmental and public affairs, including legislative advocacy and administrative issues affecting agency decisions. In or about 1996, Florida’s Viatical Settlement Act took effect. The Act requires certain life settlement providers to obtain a license from Florida’s Officer of Insurance Regulation. The Debtor, on the other hand, argued that it did not. Accordingly, the Debtor employed the Defendant to advocate its interests before the executive agencies of the Florida government.

After the Debtor filed for bankruptcy, Plaintiff filed a suit against our client for $430,100.00 as alleged fraudulent transfers under the bankruptcy code and the state laws. However, we showed that Defendant only received $390,100.00.

We reviewed the facts in the case and, with leading precedents, showed that Defendant received the transfers in good faith and for reasonably equivalent value. Firstly, we showed that Defendant received the funds in good faith as it was unaware of the SEC’s claims against the Debtor, and Defendant received the last payment way before the December 2014 judgment against the Debtor.

We also proved that the transfers were received in exchange for reasonably equivalent value because the transfers did not exceed the Defendant’s agreed fees to represent the Debtor before the executive agencies of the Florida government. With substantial case law, we showed that a payment for an antecedent debt bars a fraudulent conveyance action.

Based on the strength of our defenses, Plaintiff agreed to dismiss the case for no payment.

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Jones & Associates

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