Clawback Periods
May Extend to
Six or Ten Years
By Robert C. Meyer, Esq.
Robert C. Meyer, P.A.
Miami, Florida
A
the
avoidance
actions=
limitations period in 11 U.S.C.
‘ 5462 for avoidable transfers
under 11 U.S.C. ‘’ 544, 547 or
Such actions are not
548.3
recovery. Recovery is handled
under 11 U.S.C. ‘ 550. Adversary
proceedings, in essence, must
follow two steps: (a) avoidance
actions; and (b) recovery actions.
ACongress dealt separately
with the concepts of avoidance
and recovery in a number of
ways.@4 Among those actions
are two different time frames. relief is entered for a voluntary
bankruptcy) to commence an
Under 11 U.S.C. ‘ 546(a), an action. If the trustee is appointed
adversary proceeding may not be after the filing date, the twocommenced after the earlier of year period could be extended if
two years from the petition date or the trustee=s appointment was
one year after the commencement before the expiration of the twoor appointment of the trustee year period and more than a year
B so long as the appointment after the petition date.6 The box
occurs prior to the expiration below shows hypothetical dates
of the previously referenced to better explain this calculation.
two-year period.5 Based upon
When to File
this fact, trustees essentially
know that they have two years
The Bankruptcy Code addresses from the filing date (the date
trustees litigation counsel
must be concerned about
two things when lawsuits
arise: (a) until when can the
lawsuit be filed; and, (b) how
far back can the clawback@1 of
the avoidance action reach? The
former question is relatively
simple with statutory guidance
making the deadlines effectively
well known. The latter is a
disputed issue; and, a recent
decision in the Southern District
of Florida Bankruptcy Court
alerted practitioners. This article
will review both concepts and
outline the associated statutory
framework. In addition, this
article will discuss the many
layered analysis given by
numerous courts which deliver
reasonable
differences
of
opinion about the clawback
period jurisdictionally differing.
National Association of Consumer Bankruptcy Attorneys
Fall 2016
CONSUMER BANKRUPTCY JOURNAL
21