Consumer Bankruptcy Journal Fall 2016 | Page 23

CLAWBACK PERIODS

period for recovery actually is extended for one year after the avoidance . 8
Based upon this fact , if the trustee successfully avoids a particular matter under 11 U . S . C . ‘ 544 , 547 or 548 , the trustee may thereafter B so long as the recovery is sought within a year of the avoidance B file an action against the same party or another affiliated with the same asset for recovery . In short , a period greater than three years may occur for recovery of an asset regarding a preferential or fraudulent transfer .
How Far Back Can the Action AClawback ?@ Understanding that the trustee = s lawsuits may be filed as late as two years from the bankruptcy filing , and recovery for the same may extend for more time , the remaining issue of concern to most creditors is how far back in time can the trustee Aclawback .@ If focusing exclusively upon the federal Bankruptcy Code , that particular period of time would first expire at 90 days for a noninsider preference or one year for an insider preference . Alternatively , the trustee has up to two years to avoid fraudulent transfers to insiders or noninsiders . A basic outline of those common actions is displayed in the Box 2 below .
Box 2
Avoidance Action
Clawback Period
Time for Filing Action / Right to File
Avoid Statutory Lien
By insolvency
Later of 2 years from order for relief or 1 year from trustee appointment .
( A546 ( a )( 1 )@)/ 545
Preference Noninsider 90 days 546 ( a )( 1 )/ 547 ( b )( 4 )( A )
Preference Insider 1 year 546 ( a )( 1 )/ 547 ( b )( 4 )( B )
Fraudulent Transfer Federal
2 years 546 ( a )( 1 )/ 548 ( a )( 1 )
Insider
Fraudulent Transfer Federal
2 years 546 ( a )( 1 )/ 548 ( a )( 1 )
Noninsider
Fraudulent Transfer Federal Partner 2 years 546 ( a )( 1 )/ 548 ( b )/ 544 ( b )
Fraudulent Transfer to Self Settled Trust
10 years 9 546 ( a )( 1 )/ 548 ( e )( 1 )/ 544 ( b )
National Association of Consumer Bankruptcy Attorneys Fall 2016 CONSUMER BANKRUPTCY JOURNAL 23