In re: Wood, No. 22-8003 (6th Cir. 2022)
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Before his daughter (Julie) filed her chapter 7 bankruptcy petition, Wood opened bank accounts in her name with himself as custodian or joint account holder. He, his wife (Margaret), Julie, and another daughter, Jennifer, also held interests in a real estate joint venture. Wood admitted that the transferred money out of the accounts he controlled because Julie’s ex-mother-in-law and principal creditor (Gerstenecker), wanted to collect on a judgment. He removed Julie from the Joint Venture.
The bankruptcy court denied Julie's motion to convert to Chapter 13. The trustee filed a complaint against Wood, Jennifer, and Margaret seeking to avoid and recover the transfers on preference and fraudulent conveyance theories. The bankruptcy court refused to approve a settlement of that proceeding, citing the paltry recovery for Gerstenecker, The defendants failed to raise a genuine issue as to any material fact regarding Julie’s ownership in the bank accounts, her share of the Joint Venture, and other elements of various claims under 11 U.S.C. 544, 547, 548, 550. The Sixth Circuit Bankruptcy Appellate Panel affirmed. The bankruptcy court properly entered summary judgment regarding the transfers of the bank accounts and the Joint Venture on the theory of actual intent to hinder, delay, and defraud Gerstenecker.
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