506 B.R. 405
Bankr. E.D. Pa.2014Background
- Trustee sues as Chapter 7 trustee to avoid numerous transfers by Debtor Len Polichuk to family/related entities under 11 U.S.C. §548 and PUFTA §5104/5105, and under §544(b) as to a claim of IRS creditors; multiple defendants include five Polichuk family members and various entities; motions for summary judgment filed Aug. 29, 2013 by Non-Debtor Defendants, Lena Polnet, Andrew Nechiporenko, Larisa Lebed, and Fox Lake Realty (FLR); court grants/denies in part, denying the Non-Debtor Defendants’ Motion in full and granting/denying the others in parts; the litigation covers transfers dating back roughly 10 years before bankruptcy filing (2008).
- Debtor filed Chapter 7 in 2008; Trustee amended complaint in 2011; IRS potential creditor status discussed to trigger extended PUFTA lookback; key property transfers include 207 Elbridge Street, 415 Worthington Mill Road, Fox Lake Realty LP interests, and various bank/Schwab accounts; marital status and “entireties” ownership status are central to several PUFTA defenses; the court emphasizes burden-shifting mechanics for summary judgment under Rule 56 and principled use of the “alternative path” to defeat claims by showing lack of evidence or lack of essential elements; decision ultimately denies the Non-Debtor Defendants’ motion and grants in part/denies in part several other motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IRS’s extended lookback under PUFTA §5109 can be invoked via §544(b) to reach transfers pre-petition | Trustee asserts IRS may be a triggering creditor with a long lookback, allowing PUFTA to reach earlier transfers | Non-Debtor Defendants contend PUFTA is a statute of repose thus limited to four years | denied; court allows IRS-triggered extended lookback to stand as issue for trial (fact-intensive) |
| Whether Debtor and Marina’s marital status affects PUFTA’s entireties exclusion and the transfer at 415 Worthington Mill Road | Trustee argues Debtor and Marina may not have been married; transfers could be subject to PUFTA | Andrew argues status as married with tenants by the entirety; exclusion bars PUFTA claim | denial of summary judgment on marital status; material facts in dispute; PUFTA applicability remains unresolved at this stage |
| Whether the Elbridge Street transfers defeat Trustee’s PUFTA/§548 claims because Debtor later recovered the property pre-petition | Transfers were fraudulent and should be avoided; sequence matters | Re-transfer to Debtor/insiders restored status quo; may negate avoidance | granted for Andrew on Elbridge Street under §544(b) PUFTA logic; complete defense to §548/PUFTA claims for that transfer |
| Whether Lena’s asserted transfers (Bank of America accounts, FLR interest) are avoidable under PUFTA/§548 given MPAA and marital-status issues | Trustee alleges improper transfers to Lena within insider/related-party context | Lena asserts entireties status or legitimate loan repayments; MPAA presumptions control absent contrary evidence | partially denied; some transfers upheld against Lena (e.g., 2,3,5 BOA checks) while others denied (e.g., Check #1) and FLR/Lena’s claimed interest remains contested; summary judgment granted in part and denied in part |
| Whether Larisa’s “conduit” defense or MPAA presumption bars Trustee’s PUFTA §544(b) recovery for the 7348 Schwab Account transfers to Joseph Ayzenberg and Larisa | Trustee seeks recovery for initial transfer and subsequent transfers | Larisa invokes conduit defense; MPAA presumption controls; disputed dominion/control issues | Larisa’s conduit defense rejected for the 610,000 transfer; MPAA presumption leads to summary-judgment for Larisa on the 7348 transfer; other issues remain for trial |
Key Cases Cited
- In re Blatstein, 192 F.3d 88 (3d Cir.1999) (standard for fraudulent transfer and badges of fraud in PUFTA context)
- Schreiber v. Kellogg, 50 F.3d 264 (3d Cir.1995) ( Pennsylvania fraud/summary judgment standards; badge considerations)
- United States v. Summerlin, 310 U.S. 414 (Supreme Court 1940) (IRS/extensions/lookback interplay in bankruptcy context)
- In re Jogert, Inc., 950 F.2d 1498 (9th Cir.1991) (fraudulent transfer standards; evidence considerations at trial)
- Grace v. Gredd, 275 B.R. 190 (S.D.N.Y.2002) ( PUFTA/§548 remedial scope and asset preservation principles)