Home New Opinions The United States District Court for the District of Colorado Upholds the Ruling of Lower Court Concerning “Fraudulent Transfer” Claims

The United States District Court for the District of Colorado Upholds the Ruling of Lower Court Concerning “Fraudulent Transfer” Claims


November 17, 2021, District of Colorado – The case refers to four bankruptcy appeals brought by Appellant Jack Takacs, Paul Bagley, Donald Jackson, HLPEF/SP Management, LLC, Princeton Partners, and American National Security Management, LP (“ANSM”) and cross-appeals filed by David E. Lewis, as Chapter 7 Trustee for Stone Pine Investment Banking, LLC (SPIB). Earlier, Trustee David Lewis had initiated an adversary action against Jack Bagley, Jackson, Takacs, and 18 corporate entities. The Trustee asserted claims for recovery of “fraudulent transfers” under 11 USC §§ 548 and 544 and the Colorado Uniform Fraudulent Transfer Act; “breach of fiduciary duty”; and alter ego-veil piercing.

The Bankruptcy Court determined that certain of the Trustee’s claims were time-barred, but the intentional “fraudulent transfer” claim was not time-barred. The Court further rejected the Trustee’s claims for “breach of fiduciary duty,” alter-ego liability, and veil piercing. Upon appeal, Takacs argued that the Bankruptcy Court erred in four ways: (1) determining that the Trustee’s claim for intentional “fraudulent transfer” under Colo. Rev. Stat. § 38-8-105(1)(a) was timely; (2) by failing to utilize the proper standard in analyzing “fraudulent transfers”; (3) by failing to apply the correct test to determine whether the alleged transactions were “property”; and (4) denying as premature Defendants’ motion to alter or amend the judgment to limit the amount of the claims asserted against the SPIB estate. Amongst other things, the Appellants argued that the Bankruptcy Court erred by concluding transfers were made with the intent to hinder, delay, and defraud creditors and that SPIB received less than reasonably equivalent value in exchange for the transfers.

The District Court affirmed the bankruptcy court judgment, holding that appellants failed to convincingly establish that the Bankruptcy Court’s factual determinations and analysis about the existence of the “fraudulent” intent required for liability under section 38-8-105(1)(a) were clearly erroneous. The Court further held that the Bankruptcy Court did not err in its conclusion that Takacs, Bagley, and Jackson were the entities for whose benefit the transfer was made.

Takacs v. Lewis (In re Stone Pine Inv. Banking, LLC), Civil Action No. 20-cv-1372-WJM, 2021 U.S. Dist. LEXIS 221664 (D. Colo. Nov. 17, 2021)