In re Tousa

On May 15, 2012, the Eleventh Circuit Court of Appeals its opinion, reversing the District Court for the Southern District of Florida and affirming the Bankruptcy Court for the Southern District of Florida, at least insofar as to the bankruptcy court’s factual findings, but not remedies. Applying proper appellate review standards, the Eleventh Cirucit concluded that the bankruptcy court did not “not clearly err when it found that the Conveying Subsidiaries did not receive reasonably equivalent value for the liens and that the bankruptcy court correctly ruled that the Transeastern Lenders were entities ‘for whose benefit’ the liens were transferred.” As a result of the Eleventh Circuit’s ruling, the court reinstated the Bankruptcy Court’s order avoiding, as fraudulent transfers, the liens granted by certain TOUSA subsidiaries to Tousa’s new lenders but remanded the case back to the lower courts to determine the appropriate amount of disgorgement.