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
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 affili FVBvFFR6R76WBf"&V6fW'6'BW&Bw&VFW"FF&VRV'267W"f"&V6fW'b76WB&Vv&Fr&VfW&VF"g&VGVV@G&6fW"आrf"&66FR7F6v&6VFW'7FFrFBFRG'W7FVS2w7VG2&RfVB2FR2GvV'2g&FR&'WF7fƖrB&V6fW'f"FR6RWFVBf"&RFRFR&Vr77VRb66W&F7@7&VFF'22rf"&6FR6FRG'W7FVR6v&6bf7W6rW6W6fVǒWFPfVFW&&'WF76FRFB'F7V"W&BbFRvVBf'7BW&RBF2f"6FW &VfW&V6R"RV"f"6FW"&VfW&V6RFW&FfVǒFRG'W7FVR2WFGvV'2Ff@g&VGVVBG&6fW'2F6FW'2"6FW'2&62WFƖRbF6R67F22F7VBFR&"&Vr& fF6R7Fࠤ6v&6W&@FRf"fƖr7FfB7FGWF'ƖVࠤ'6fV7FW"b"V'2g&&FW"f"&VƖV`"V"g&G'W7FVRFVBࢄSCbSCP&VfW&V6R6FW F0SCbSCr"B&VfW&V6R6FW V SCbSCr"B"g&VGVVBG&6fW"fVFW&"V'0SCbSC"V'0SCbSCg&VGVVBG&6fW"fVFW&'FW "V'0SCbSC"SCB"g&VGVVBG&6fW"F6Vb6WGFV@G'W7@V'3SCbSCRSCB"&vBFfP6FW g&VGVVBG&6fW"fVFW&6FW F766Fb67VW"&'WF7GF&W2f#`45TU"$%UD5U$#0