TOUSA: Bankruptcy Court's Fraudulent Transfer Decision Quashed by District Court | Practical Law
An update on In re TOUSA where the US District Court for the Southern District of Florida (District Court) quashed the decision of the US Bankruptcy Court for the Southern District of Florida (Bankruptcy Court) which held that TOUSA, Inc.'s $420 million payment to certain of its lenders constituted a fraudulent transfer under section 548 of the Bankruptcy Code. Calling the Bankruptcy Court's decision "clearly erroneous," the District Court helped affirm the validity of corporate lending practices based on credit support from subsidiary guarantors.