Issue(s): Whether homestead property exempted by a debtor can later be avoided under 11 U.S.C. §§ 547 and 544.
Holding(s): The bankruptcy court lacks subject matter jurisdiction over avoidance actions on homestead property that was properly exempted under 11 U.S.C. § 522 (b). A debtor may only avoid the transfer of exempt property if: (1) the transfer was not a voluntary transfer by the debtor; (2) the debtor did not conceal the property; (3) the trustee did not attempt to avoid the transfer; (4) the transferred property is the kind that could have been exempted if the trustee had avoided the transfer under § 522(g); and (5) the debtor seeks to exercise the trustee’s enumerated avoidance powers. If the transfer was voluntary then the debtor lacks standing to bring the issue before the court.
Crescent Resources Litigation Trust v. Nexsen Pruet, LLC (Jan. 23, 2012)
Issue: Issue: Whether the Litigation Trust’s complaint alleging preferential transfers under § 547 and fraudulent transfers under § 548 sufficient to withstand a Rule 12(b)(6) motion to dismiss.
Holding: Trust’s § 547 preferential transfer claim was dismissed without prejudice because it failed to sufficiently plead the existence of an antecedent debt. Trust’s § 548 fraudulent transfer claim was dismissed without prejudice because the Trust did not plead specific facts to allow the Court to draw a reasonable inference of insolvency or of reasonably equivalent value.