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How Much Control Must a Bank Exert to be Considered an Initial Transferee Under 11 U.S.C. § 550? Can Substantive Consolidation be Applied Nunc Pro Tunc to Help ‘Create’ an Avoidance Action? Chief Judge Frank (Bankr. E.D. Pa.) Provides an Answer in In re Universal Marketing, Inc.

By Evan T. Miller, Esq.

Chief Judge Frank of the Bankruptcy Court for the Eastern District of Pennsylvania recently issued an opinion in Goldstein v. Wilmington Savings Fund Society (In re Universal Marketing, Inc.) that deals with certain issues not often seen in avoidance actions.  Specifically, the opinion touches upon the level of control or dominion that a bank must exercise over a disputed conveyance for purposes of determining whether it was an “initial transferee” under 11 U.S.C. § 550. Continue reading