Thanks, I’ve amended the wording to mention this (and also correct the first bit—it was definitely >90 days before the bankruptcy filing). I note that Molly says in her post that:
The second clawback process (called a “fraudulent conveyance claim”) targets transactions that happened up to two years prior to the bankruptcy filing. The root of these claims is an allegation that the debtor moved assets out of their organization for the purpose of frustrating future creditor claims. These types of claims are more complicated to prove, less commonly brought, and more individualized to the specific transaction.
IANAL, but “for the purpose of frustrating future creditor claims” seems like quite a high bar. Have DM’d you.
The fraudulent conveyance statute requires satisfaction of one of two conditions. One is ” actual intent to hinder, delay, or defraud any entity to which the debtor was or became . . . intended.” The other is that the debtor “received less than a reasonably equivalent value in exchange for such transfer or obligation” and was insolvent at the time (or met one of three other criteria).
That being said—while it wouldn’t be appropriate for me to speculate on any specific organization’s exposure—both the foreign nature of an organization and a relatively small grant size are favorable predictors for the estate deciding clawback proceedings would not be cost-effective and/or settling the claim on favorable terms in light of those costs. I think those kinds of facts may ultimately matter more than the timing of a grant.
Thanks, I’ve amended the wording to mention this (and also correct the first bit—it was definitely >90 days before the bankruptcy filing). I note that Molly says in her post that:
IANAL, but “for the purpose of frustrating future creditor claims” seems like quite a high bar. Have DM’d you.
The fraudulent conveyance statute requires satisfaction of one of two conditions. One is ” actual intent to hinder, delay, or defraud any entity to which the debtor was or became . . . intended.” The other is that the debtor “received less than a reasonably equivalent value in exchange for such transfer or obligation” and was insolvent at the time (or met one of three other criteria).
That being said—while it wouldn’t be appropriate for me to speculate on any specific organization’s exposure—both the foreign nature of an organization and a relatively small grant size are favorable predictors for the estate deciding clawback proceedings would not be cost-effective and/or settling the claim on favorable terms in light of those costs. I think those kinds of facts may ultimately matter more than the timing of a grant.