United States Ninth Circuit

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In the Matter of Fitness Holdings International, Inc., 11-56677

Judgment affirming the bankruptcy court's dismissal of a complaint alleging that a debtor's pre-bankruptcy transfer of funds to its sole shareholder, in repayment of a purported loan, was a constructively fraudulent transfer under 11 U.S.C. section 548(a)(1)(B), is vacated, where: 1) a court has the authority to recharacterize a purported loan as an equity investment for purposes of section 548; 2) a transaction creates a debt if it creates a "right to payment" under state law; and 3) because the district court concluded that it lacked the authority to make this determination, the matter is remanded for further proceedings.

Appellate Information

  • Decided 04/30/2013
  • Published 04/30/2013




  • United States Ninth Circuit