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Bank's Consensual Security Interest In Its Customer's Deposit Account Did Not Give It "Dominion And Control" Sufficient To Trigger Fraudulent Transfer Liability

LexisNexis (September 18, 2017, 11:42 AM EDT) -- A significant recent decision from the Sixth Circuit tests the power of a trustee in bankruptcy to avoid allegedly fraudulent transfers of funds from the now-bankrupt debtor (Teleservices) to its depository/lending bank. Meoli v. The Huntington National Bank, 848 F.3d 716 (6th Cir. 2017).

Sixth Circuit summarizes the issues.  Huntington loaned money to, and maintained the deposit account of a company, Cyberco, which had created an affiliate, Teleservices, to perpetuate a Ponzi scheme. As  part of the scheme, the two companies shuttled funds between their deposit...
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