IN RE: FAIR FINANCE COMPANY; BRIAN A. BASH, CHAPTER 7 TRUSTEE v. TEXTRON FINANCIAL CORPORATION - Articles

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IN RE: FAIR FINANCE COMPANY; BRIAN A. BASH, CHAPTER 7 TRUSTEE v. TEXTRON FINANCIAL CORPORATION

Posted by: Karen Belcher on Sep 10, 2021

Court: 6th Circuit Court (Published Opinions)

Attorneys 1: ARGUED: Daniel R. Warren, BAKER & HOSTETLER LLP, Cleveland, Ohio, for Appellant.

Attorneys 2: ARGUED: Mitchell A. Karlan, GIBSON, DUNN & CRUTCHER LLP, New York, New York, for Appellee.

Attorneys 3: ON BRIEF: Daniel R. Warren, Scott C. Holbrook, Michael A. VanNiel, Jeremy S. Dunnaback, BAKER & HOSTETLER LLP, Cleveland, Ohio, for Appellant.

Attorneys 4: ON BRIEF: Mitchell A. Karlan, Lee G. Dunst, Nancy Hart, Timothy Sun, GIBSON, DUNN & CRUTCHER LLP, New York, New York, Quintin F. Lindsmith, BRICKER & ECKLER LLP, Columbus, Ohio, for Appellee.

Judge(s): COLE, BUSH, and NALBANDIAN, Circuit Judges

Court Appealed: United States District Court for the Northern District of Ohio at Akron

NALBANDIAN, Circuit Judge. Can a party’s later—arguably bad-faith—actions undermine its earlier perfected security interest so that payments made in connection with that security interest are fraudulent transfers under Ohio law? That’s the main question here.

The bankruptcy trustee now seeks to avoid payments from Fair Finance to Textron as fraudulent transfers under Ohio’s Uniform Fraudulent Transfer Act, Ohio Rev. Code § 1336.01, et seq. (“OUFTA”). The district court rejected the trustee’s attempt to unwind the transfers. The trustee appeals, arguing that the district court mistakenly rejected its arguments at summary judgment and erroneously instructed the jury at a trial on a related claim. We AFFIRM.

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