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Article
The Eleventh Circuit and the "Tort" of Making a Fraudulent Transfer
Bankruptcy Law Letter (2021)
  • David G. Carlson, Benjamin N. Cardozo School of Law
Abstract
In Suvicmon Development Co. V. Morrison (2021), a debtor supposedly made a fraudulent transfer and then filed for bankruptcy. In the bankruptcy, a creditor’s claim was not discharged. The creditor sued the debtor for the “tort” of making a fraudulent transfer. If fraudulent transfers are torts, the debtor would have to pay the original undischarged judgment and a new judgment for the tort of fraudulent transfer. The Eleventh Circuit read Alabama law as requiring the debtor to pay a second time because the debtor hindered collection of the first judgment. But the new debt for the fraudulent transfer was held to be discharged, even though the creditor’s original judgment was not discharged. This short piece denies that fraudulent transfers are torts in the first place. Debtors have the right to make fraudulent transfers, according to the United States Supreme Court in Adler v. Fenton (1861). Therefore, the debtor did not have to pay twice, and there was no need to decide that the tort of fraudulent transfer is a dischargeable claim.
Keywords
  • fraudulent transfer,
  • bankruptcy,
  • tort
Disciplines
Publication Date
June 15, 2021
Citation Information
David G. Carlson. "The Eleventh Circuit and the "Tort" of Making a Fraudulent Transfer" Bankruptcy Law Letter Vol. 41 (2021) p. 1
Available at: http://works.bepress.com/david_carlson/131/