BMW also argued that the Payments were not subject to forfeiture under § 544 because German law governed the transaction and did not provide a state-law remedy for the trustee.In ruling on BMW’s motion to dismiss, the court found the Payments to be extraterritorial in nature.However, the court rejected BMW’s argument that the fraudulent transfer provisions of § 548 do not apply to extraterritorial transfers (i.e., those for which the “center of gravity” is outside the United States), concluding that § 548 applies to property everywhere in the world because any property recovered by a debtor or trustee becomes property of the estate under § 541 and the estate should have access to its property regardless of where it may be located. After determining that the complaint sufficiently pleaded that Fisker did not receive reasonably equivalent value in the form of materials, services, or otherwise from BMW after making the Payments and that Fisker had been insolvent for several years prior to the Payments, the Court allowed the trustee’s § 548 claim to proceed in part.
P., a Delaware limited partnership (the Partnership), is made and entered into as of this 15th day of November, 2016 by Plains All American GP LLC, a Delaware limited liability company, as the general partner, and, pursuant to Section 11.2(d) of the Seventh Amended and Restated Limited Partnership Agreement dated as of October 21, 2013, by and among the General Partner and the Limited Partners of the Partnership (as amended, the Seventh A&R Limited Partnership Agreement), is binding on the Persons listed as Limited Partners in Schedule I hereto, as such schedule may be amended or supplemented from time to time in accordance herewith. Upon the dissolution of the Partnership, such party as is designated by the General Partner will act as liquidating trustee of the Partnership (the Liquidating Trustee) and proceed to wind up the business and affairs of the Partnership in accordance with the terms of this Agreement and applicable law.The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.Any views expressed herein are those of the author(s) and not necessarily those of the law firm’s clients.Because German law did not provide a remedy for the trustee under § 544, the Court dismissed the claim. Finally, the Court allowed the trustee’s claim for unjust enrichment to proceed for the full $32,579,798.87 amount of the Payments.In doing so, the Court recognized that the complaint pleaded that Fisker made the Payments to BMW with the expectation of receiving a service and materials in return and that BMW allegedly did provide the service or materials.Thereafter, the court allowed the plaintiff to proceed with its fraudulent transfer claim against BMW, but reduced the amount at issue from approximately $32.5 million to $793,761.87 because the majority of the transfers at issue occurred outside the two-year fraudulent transfer period under 11 U. As a result, Fisker made payments to BMW in June, July, and December of 2011 and April of 2012 totaling $32,579,798.87 (the “Payments”).
(collectively, “Fisker”), designed and manufactured plug-in electric hybrid cars.
The plaintiff alleged that BMW did not deliver engines or other products to Fisker under the agreements.
On November 22, 2013, Fisker filed its Chapter 11 bankruptcy petition. Under the plan, a liquidating trust was formed, which, among other things, initiated an adversary proceeding against BMW attempting to recover the Payments as alleged fraudulent transfers under § 544 and § 548 of the Bankruptcy Code and the allegedly applicable California or Delaware law.
HSBC placed the partial payments into suspense until a full payment was received an imposed late fees on the payment.
When the Taylors filed for chapter 13 bankruptcy, HSBC sent a referral to the Udren Law Firm to file a motion for relief from automatic stay.
As a result, businesses must remain mindful that all pre-petition transactions with a potentially insolvent party are likely to be evaluated as a source of potential claims.