509 F. App'x 77
2d Cir.2013Background
- Liquidation Trust appeals district court's dismissal of its second amended complaint asserting fraudulent conveyance and unjust enrichment under Bankruptcy Code and NY law.
- Trust contends CarCo received less than reasonably equivalent value in a transfer/debt incurrence.
- Trust relies on Motors intercompany relationship; Daimler valued Motors at $5.5 billion while Trust alleges only $450 million.
- Trust asserts a $12 billion credit facility had no value, contrary to normal borrowing value expectations.
- Trust omits other assets it contends had value, including cash repayment of a $920 million debt and Daimler's conveyance of the National Sales Companies valued at $47 million.
- Bankruptcy court and district court concluded Trust failed to plausibly allege lack of reasonably equivalent value; district court and bankruptcy court opinions are reviewed de novo for legal conclusions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Trust plausibly alleged lack of reasonably equivalent value | Trust contends CarCo received less than fair value for transfers. | Daimler argues value exchanges were not plausibly deficient in value. | No plausible lack of value; dismissal affirmed. |
| Whether valuation of Motors and other assets was implausibly inflated or omitted | Trust asserts Motors worth far less and omits other value assets. | Daimler disputes the Trust's valuation method as implausible and incomplete. | Court finds Trust's valuations implausible; affirmance of dismissal. |
Key Cases Cited
- In re NextWave Pers. Commc'ns, Inc., 200 F.3d 43 (2d Cir. 1999) (reasonably equivalent value standard for fraudulent transfer)
- Rubin v. Mfrs. Hanover Trust Co., 661 F.2d 979 (2d Cir. 1981) (significant disparity harms creditors; equitable concerns for value tests)
- Klein v. Tabatchnick, 610 F.2d 1043 (2d Cir. 1979) (valuation questions often factual but may be addressed as law)
- Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406 (2d Cir. 2008) (courts may take judicial notice of court filings to establish publicly asserted facts)
- In re F.C.C., 208 F.3d 137 (2d Cir. 2000) (per curiam; relevance to categorizing pleadings and reliance on pleadings)
- Mellon Bank, N.A. v. Metro Commc'ns, Inc., 945 F.2d 635 (3d Cir. 1991) (borrowing ability has value; financing considerations in value determinations)