Centralized Cash-Management Systems and Fraudulent-Transfer Litigation: Is It "Reasonable"?

June 2013
ABI Journal;Jun2013, Vol. 32 Issue 5, p38
The article discusses the emerging concern of fraudulent-transfer actions due to a debtor's use of a centralized cash-management system (CMS). It argues over the use of CMS for companies to benefit from their own operations while forcing suppliers the risk of confronting a fraudulent-transfer action. Moreover, discussed is the theory of a fraudulent-conveyance action that stems from the basic concept of fraudulent transfers.


Related Articles

  • A Trade Creditor's Guide to Defending "Wrong Payor" Fraudulent Transfer Cases. B. Murley, Lucian; Steinkamp, Neil // Commercial & Business Litigation;Fall2013, Vol. 15 Issue 1, p13 

    The article discusses suggestions on dealing with wrong payor fraudulent transfer cases. It states that an actual intent to defraud creditors executed by a debtor makes for an intentional fraudulent transfer. There are ways to deal with such cases including making the creditor attack the...

  • Side-Stepping Exposure to Bankruptcy Litigation: Fraudulent Transfers and Centralized Cash Management Systems. GIAIMO, CHRISTOPHER; WORKMAN, DONALD; KESSLER, DENA // Business Credit;May2014, Vol. 116 Issue 5, p42 

    The article discusses how creditors can avoid litigation involving fraudulent transfers and centralized cash management systems (CMS). It explains the two kinds of fraudulent transfer action and the link between centralized CMS and fraudulent transfer action as well as the possible defense to...

  • Cash-Management Accounts and Fraudulent Transfer Actions. GIAIMO, CHRISTOPHER J.; OZTURK, FERVE E.; KESSLER, DENA S. // ABI Journal;Aug2014, Vol. 33 Issue 8, p46 

    The article discusses the cash-management systems (CMS) of companies and fraudulent transfer claims of debtors and trustees in the U.S. It mentions issues on the systems applied by firms for operating their complex business operations in filing claims for Chapter 11 of the Bankruptcy Code which...

  • DETERMINING THE PROPER APPLICATION OF �546(c) TO A SELLER'S RIGHT TO RECLAIM WHEN THERE IS A PRIOR SECURED CREDITOR: A TWO PART TEST. Goodman, Eric // Emory Bankruptcy Developments Journal;2004, Vol. 20 Issue 2, p427 

    Discusses the development of case law concerning the application of � 546(c) of the U.S. Bankruptcy Code to the interests of reclaiming sellers when another creditor asserts a secured interest in the debtor's inventory or equipment. Issues regarding the application of � 546(c) in such...

  • legal notes. Helfat, Jonathan N.; Kohn, Richard M. // Secured Lender;Oct2012, Vol. 68 Issue 9, p68 

    The article examines fraudulent transfers and the right of a secured creditor to collect pre- and post-petition default interest. In Section 548 of U.S. Bankruptcy Code, a transfer is reportedly not considered to be fraudulent if debtor received reasonably equivalent value in exchange for...

  • Measuring Reasonably Equivalent Value. Baliban, Jeffrey L. // Bankruptcy & Insolvency Litigation;Winter2012, Vol. 17 Issue 2, p27 

    The article discusses fraudulent conveyance experienced by bankruptcy professionals with regards to the analysis of solvency. It notes the importance of a detailed fraudulent transfer analysis focusing on the debtor and the transferral time. It states the history of the 11 U.S. Code section 548...

  • Preferential Transfers Not Always Legitimate.  // USA Today Magazine;Apr2004, Vol. 132 Issue 2707, p5 

    Focuses on the problems faced by creditors with the increase in bankruptcy filings in the U.S. Need for creditors to investigate the legitimacy of bankruptcy claims by debtors and trustees; Tips for contending with potential double whammy or demand by trustees and debtors for creditors to...

  • Proving Solvency: Defending Preference and Fraudulent Transfer Litigation. Stearn, Jr., Robert J. // Business Lawyer;Feb2007, Vol. 62 Issue 2, p359 

    Litigating solvency can be a complicated endeavor. This article provides a general road map for proving solvency in the defense of preference and fraudulent transfer litigation. The three common measures of solvency are discussed: the "balance sheet" test; the "unreasonably small capital" test;...

  • Protection for Whom? Creditor Conflict and Bankruptcy. Longhofer, Stanley D.; Peters, Stephen R. // American Law & Economics Review;Fall2004, Vol. 6 Issue 2, p249 

    In the absence of a bankruptcy law, private debt collection remedies generally result in an ad hoc disposal of the debtor's assets, which reduces the aggregate value of creditors' claims. We show that creditors will often choose not to write private contracts that would prevent this inefficient...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics