State Law Fraudulent Transfer Claims: Reversion to Individual Creditors

Bringing and Defending Claims Abandoned by the Trustee or Estate

Recording of a 60-minute CLE webinar with Q&A

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Conducted on Thursday, October 25, 2012

Recorded event now available

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Course Materials

This CLE course will provide counsel with a review of the reversion to creditors of state law fraudulent transfer claims abandoned in bankruptcy. The panel will also discuss the applicability of the bankruptcy safe harbor provisions outside bankruptcy and arguments supporting or defending against state law claims.


The limits of fraudulent transfer litigation is being tested in a matter arising from the Tribune bankruptcy where District Court Judge Pauley of the Southern District of New York may ultimately decide the rights of creditors to bring state law fraudulent transfer claims when the bankruptcy estate representative has not brought all claims that arguably could have been brought.

The Tribune bankruptcy court decided that a non-bankruptcy court (which turned out to be Judge Pauley's court) should decide these issues.  In particular, whether state law fraudulent transfer claims may revert to creditors after the Bankruptcy Code statute of limitations for a trustee to bring such claims has expired. Similar claims of automatic reversion to creditors have been made in the Lyondell case, although the bankruptcy court has yet to rule on the issue.

A ruling which confirms that lawsuits may be brought by creditors against public shareholders of bankrupt LBOs could lead to a flood gate of law suits in this area, and undermine the applicability of the safe harbor protection of Sec. 546(e) of the Bankruptcy Code in such circumstance.

Listen as our authoritative panel of attorneys provides a review of the applicable law and arguments supporting and defending the issues raised.



  1. Overview of the Tribune case ruling and Lyondell claims
  2. Automatic reversion of state law claims to creditors
  3. Applicability of safe harbor defenses to state claims outside bankruptcy


The panel will review these and other key questions:

  • What claims may revert to creditors of the debtor to assert in state court litigation?
  • What is the status of the fraudulent transfer case against the Tribune shareholders and the potential ruling in Lyondell?
  • What arguments may be made in support of or in opposition to the applicability of the bankruptcy safe harbor exemptions in non-bankruptcy court fraudulent transfer suits?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.


Arthur J. Steinberg
Arthur J. Steinberg

King & Spalding

He is a senior financial restructuring partner with 30 years of experience representing examiners, trustees, corporate...  |  Read More

Christopher G. Boies
Christopher G. Boies

King & Spalding

He is a member of the firm’s Financial Restructuring Practice Group. Prior to joining the Firm, he was an...  |  Read More

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