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In re The Cassandra Group & Geltzer, as Trustee v. Guy D'antona

312 B.R. 491 (Bkrtcy.S.D.N.Y., 2004.)

Plaintiff, the trustee in bankruptcy for an investment advisory services company, brought an adversary bankruptcy proceeding against our client, the attorney-in-fact for an overseas corporation from whom the debtor had rented an apartment. Plaintiff sought to avoid several transfers, claiming actual and constructive fraudulent transfer, and sought to recover the value of the transactions from the attorney-in-fact. The transfers in question were the collection and deposit of rents for the apartment leased by the debtor. By virtue of a power of attorney, the attorney-in-fact managed the apartment, deposited all rents in his IOLA fiduciary account, and took his attorney's fees from the same.

The court denied Plaintiff's summary judgment motion, and granted partial summary judgment to our client, finding that our client, as an agent of his principal, did not have "dominion and control" over the transferred funds, and took no benefit from the transactions he carried out for his principal, other than the legal fees to which he was entitled. The attorney-in-fact was found by the court to be "an innocent conduit of funds," and not fraudulent transferee with the power to use the funds for his own purposes. Further, the court found that our client's payment of his own legal fees from the account in which he deposited rent for the apartment was on par with a maintenance fee which the attorney-in-fact, by virtue of the power of attorney, was empowered to effect.

The Court denied Plaintiff's summary judgment motion because Plaintiff did not show an absence of fair consideration in exchange for the rent payments to the attorney-in-fact.
Link to Full Text of Decision

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