Bluestone Law obtained summary judgment for its client, a leading Mid-Atlantic commercial property owner, when a Maryland Circuit Court judge ruled that insolvent entities cannot prefer insider creditors ahead of arm’s-length, third-party general creditors because such preferences violate the “fair consideration” requirement of the Maryland Uniform Fraudulent Conveyance Act (“MUFCA”). In granting the motion, the Court voided more than $1 million in fraudulent transfers between a leading Washington, D.C.-area retailer and its corporate affiliate.
Zack Bluestone led the team that delivered a complete victory before Judge Dwight Jackson of the Circuit Court for Prince George’s County. The summary judgment motion argued that the “fair consideration” requirement of the MUFCA (Md. Code Ann.., Com. Law §§ 15-203, 204) requires both reasonably equivalent and good faith when an insolvent debtor conveys funds pursuant to a consignment agreement between parties with common ownership. In making the distinction between insider controlled creditors and relatives, the briefing, and supporting precedent, made clear that payments received by a creditor with full knowledge of a debtor’s insolvency are presumed to lack “good faith” as a matter of law.
After substantial discovery and a lengthy hearing on cross-motions for summary judgment, Judge Jackson rejected the defendant’s arguments and granted plaintiff’s summary judgment request.
Bluestone Law continues to be at the forefront of fraudulent transfer, creditor’s rights, and asset/debt recovery law in the U.S. and abroad. In addition to representing leading government agencies worldwide, the Bluestone team advises creditors and judgment holders of all types in tracing and executing on assets. The litigation efforts were led by attorneys Zack Bluestone and Gabe Bluestone.