MANO-Y&M, Ltd. v. Field, No. 13-16020 (9th Cir. 2014)
Annotate this CaseMano appealed the district court's holding, under 11 U.S.C. 550, that Mano was the initial transferee of $311,065.25 paid by debtor in connection with the sale of a six-acre shopping plaza in Raymondville, Texas. Applying the proper standard in the In re Incomnet dominion test, the court concluded that the district court did not err in determining that Mano was the initial transferee of the disputed funds and in declining to address Mano's alternative argument because it was waived. The court held that In re Presidential is no longer good law in this Circuit insofar as it conflicts with the pure dominion test articulated in In re Incomnet. Accordingly, the court affirmed the judgment of the district court.
Court Description: Bankruptcy. The panel affirmed the district court’s decision affirming the bankruptcy court’s summary judgment in an adversary proceeding seeking avoidance of a fraudulent transfer. Applying the “dominion test,” the panel held that under 11 U.S.C. § 550, appellant Mano-Y&M Ltd. was the initial transferee, rather than a subsequent transferee, of $311,065.25 paid by the bankruptcy debtor, The Mortgage Store, Inc., in connection with the sale of a shopping plaza. The panel concluded that McCarty v. Richard James Enters., Inc. (In re Presidential Corp.), 180 B.R. 233 (9th Cir. BAP 1995), which applied in part the “control test” for identifying initial transferees, is no longer good law.
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