In Meoli v. Huntington Nat'l Bank, the Sixth Circuit affirmed a multi-million judgment against The Huntington National Bank stemming from a bankruptcy trustee's lawsuit seeking to recover fraudulent transfers from a debtor company's operation of a Ponzi scheme. The opinion discussed several aspects of fraudulent transfer and recovery law, including the following: (i) that the dominion-and-control test is used to determine transferee liability for both an initial transferee and subsequent transferee; (ii) a bank account holder's right to withdraw money from a deposit account prevents a bank from exercising dominion-and-control; (iii) in evaluating a fraudulent transferee's defenses, a court should perform a "holistic factual determination of whether a reasonable person, given the available information, would have been alerted to the transfer voidability;" and (iv) the Court refused to articulate whether the standard for measuring "good faith" is a subjective or objective standard. The case citation is 2017 U.S. App. LEXIS 2248 (6th Cir. Feb. 8, 2017).
Sixth Circuit Court of Appeals Issues Lengthy Opinion Regarding Claims of Actual Fraud
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