Analysis and Interpretation of the Contract Between the Parties Resulted in a Settlement and Dismissal of Case for Less than 5% of the Complaint Amount

The Debtor, an automotive distribution company, entered into an agreement with the Defendant to become a domestic vehicle dealer. The Defendant deposited 50% of the total amount due, but the Debtor returned this deposit when the business opportunity fell through.

After the Debtor filed for bankruptcy, the Trustee sued the Defendant for actual and constructive fraudulent conveyance, claiming the deposit was non-refundable and that the Defendant assumed all risks.

After analyzing the agreement and relevant legal precedents, we argued that the deposit’s return constituted reasonably equivalent value to the Debtor. This led to a settlement for the Defendant for less than 5% of the complaint amount.

The plaintiff contends that the transfers were fraudulent since the Debtor received no value in exchange.

(20)