as such, courts are reluctant to invoke merely b/c something § 541(d) … looks like a (investors in as unsecured Cs) trust facilitator” “1031 remedy (usually) imposed in favor of fraud victim, Constructive presupposing that tortfeasor is holding property on behalf of fraud victim As opposed to parties intended to create BUT failed to resulting trust trust, formally do so is solely remedial if victim gives $$ to tortfeasor Constructive trust to buy property for victim, BUT tortfeasor buys property for himself, then court MAY trace $$ back into tortfeasor’s hands (creation of is NOT tortfeasor’s intent)… trust whereas, w/ creation of is admitted intent of resulting trust, trust … both parties D’s property going to victim in a constructive trust “constructive (NOT recorded)… conveyance” as hypothetical wants to victim’s interest in Trustee, BFP4V, avoid property as a prior unrecorded conveyance (as per § 544(a)(3))… BUT, victim claims to be beneficiary to (constructive) (as trust … per § 541(d))… BUT, states that bankruptcy estate is also comprised § 541(a)(3) … of recoveries under AND, allows for of § 550… § 550 “recovery” interests avoided § 544… need NOT always follow if avoidance trustee “Recovery” avoids a (non-possessory), then nothing to lien “recover”… BUT, is viewed ONLY as ancillary/remedial statute § 550 … likely applies whether or NOT any is necessary “recovery” AND, IS limited by BUT, is § 541(a)(1) § 541(d)… § 541(a)(3) … NOT limited by § 541(d) thus, if is attempting to bring property held in trustee constructive … into estate 2 trust “doors”… is NOT open blocked by (NO § 541(a)(1) § 541(d) trust “door” property) IS open NOT blocked by § 541(a)(3) § 541(d) “door” Mortgages § 541…
… as such, courts are reluctant to invoke § 541(d) merely b/c something looks like a trust (investors in “1031 facilitator” as unsecured Cs) Constructive remedy (usually) imposed in favor of fraud victim, presupposing that tortfeasor is holding property on behalf of fraud victim As opposed to resulting trust parties intended to create trust, BUT failed to formally do so Constructive trust is solely remedial if victim gives $$ to tortfeasor to buy property for victim, BUT tortfeasor buys property for himself, then court MAY trace $$ back into tortfeasor’s hands (creation of trust is NOT tortfeasor’s intent)… … whereas, w/ resulting trust, creation of trust is admitted intent of both parties D’s property going to victim in constructive trust a “constructive conveyance” (NOT recorded)… Trustee, as hypothetical BFP4V, wants to avoid victim’s interest in property as a prior unrecorded conveyance (as per § 544(a)(3))… … BUT, victim claims to be beneficiary to (constructive) trust (as per § 541(d))… … BUT, § 541(a)(3) states that bankruptcy estate is also comprised of recoveries under § 550… AND, § 550 allows for “recovery” of interests avoided § 544… “Recovery” need NOT always follow avoidance if trustee avoids a lien (non-possessory), then nothing to “recover”… … BUT, § 550 is viewed ONLY as ancillary/remedial statute likely applies whether or NOT any “recovery” is necessary … AND, § 541(a)(1) IS limited by § 541(d)… BUT, § 541(a)(3) is NOT limited by § 541(d) … thus, if trustee is attempting to bring property held in constructive trust into estate 2 “doors”… § 541(a)(1) “door” is NOT open blocked by § 541(d) (NO trust property) § 541(a)(3) “door” IS open NOT blocked by § 541(d) Mortgages § 541…
Bankruptcy_Schechter-Fall-2009.docx