United States Fourth Circuit

District court judgment affirming the bankruptcy court's decision to grant summary judgment for defendants in adversary proceeding in which plaintiff sought to recover from defendant assets transferred into the debtor's brokerage accounts at defendant and commissions, fees, and margin interest payments paid to defendant as fraudulent conveyances, is affirmed, where: 1) the Customer Transfers were not transfers of the debtor's property; 2) notwithstanding funds taken and retained as commissions and fees, defendant was not the initial transferee of the Cash Transfers; 3) the district court did not err in affirming the bankruptcy court's determination that defendant's commissions and fees were protected as "settlement payments" under 11 U.S.C. section 546(e), the "stockbroker defense," once they were shown to be reasonable and customary in the industry; and 4) the district court therefore did not err in affirming the bankruptcy court's ruling that in pari delicto bars plaintiff's tort claims against defendant.

Appellate Information

• Decided 05/24/2013
• Published 05/24/2013

Judges

• WYNN

Court

• United States Fourth Circuit

Counsel