(6th Cir. Jan. 3, 2017)
The Sixth Circuit affirms the bankruptcy court’s dismissal of the trustee’s fraudulent transfer complaint. The trustee alleged the defendant was the recipient of a fraudulent transfer from the debtors, but the transfer was actually made to the defendant by an LLC seperate from the debtors. The trustee failed to allege facts sufficient for the doctrine of substantive consolidation and veil piercing is inappropriate here because Kentucky courts endorse the vicarious liability approach to veil piercing rather than the identity approach. The debtor had no interest in the alleged alter ego’s assets. Opinion below.
Attorneys for Defendant: Stoll Keenon Ogden PLLC, Adam M. Back
Attorneys for Trustee: Bingham Greenebaum Doll LLP, Richard Boydston
Author: Matt Lindblom