Kirschner Ex Rel. Refco Litigation Trust v. Agoglia (In Re Refco Inc.)
461 B.R. 181
Bankr. S.D.N.Y.2011Background
- Trustee seeks to avoid and recover transfers under the Refco chapter 11 plan via the Refco Litigation Trust; MH challenged as to 12(b)(6) dismissal.
- Trustee's claims against MH narrowed to constructive fraudulent transfer under NY DCL and unjust enrichment, amount $4 million.
- MH moves to dismiss; trustee concedes no knowledge allegations against MH and MH is not an insider of Refco.
- Facts: SPA 2001 sale/transfer to MH pursuant to contingent purchase price; $4 million payment triggered by LBO-related conditions; payment came from RGL via SPA obligations.
- Court grants MH's motion to dismiss, holding no fair consideration under NY DCL and no unjust enrichment given valid SPA and payment of antecedent debt.
- Background details indicate focus on whether the payment satisfies fair consideration and whether Stern limits the court's final judgments in core proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Stern bars final judgment on MH's claims | Stern does not apply to avoid final judgment on fraud claims that flow from federal law. | Stern precludes final judgment on this type of core state-law counterclaim. | Stern does not preclude final judgment; alternative path of proposed findings maintained. |
| Whether MH LBO-Related Transfer lacked fair consideration | Transfer was for RGL antecedent debt, not less than fair value. | Transfer satisfied fair consideration under NY DCL §272; good faith present. | Dismissed: transfer had fair consideration; no avoidance under NY DCL. |
| Whether the unjust enrichment claim survives given contract governing transfer | Unjust enrichment independent of SPA due to inequitable result. | Contract governs; unjust enrichment barred when valid contract controls. | Dismissed: contract governs; no unjust enrichment. |
Key Cases Cited
- Sharp Int'l Corp. v. State Street Bank and Trust Co., 403 F.3d 53-54 (2d Cir. 2005) (fair consideration test governs constructive fraud claims; good faith transferee)
- In re Canopy Fin., Inc., 2011 WL 3911082 (N.D. Ill. 2011) (distinguishes Canopy from Sharp on NY DCL)
- Stern v. Marshall, 131 S. Ct. 2594 (U.S. 2011) (limits on final judgments by non-Article III tribunals; Stern central authority)
- Marathon Pipe Line Co. v. White, 458 U.S. 50 (U.S. 1982) (illustrates Article III/private right/public right distinctions; Marathon framework)
- Mankin, 823 F.2d 1296 (9th Cir. 1987) (fraudulent transfer claims under federal bankruptcy power; core status)