Foreclosure Sales as Fraudulent Transfers

Authors

David G. Carlson, Benjamin N. Cardozo School of LawFollow

Publication Date

2024

Journal

American University Business Law Review

Abstract

The Supreme Court has declared that noncollusive, regularly conducted foreclosure sales are not “constructive” fraudulent transfers voidable by a bankruptcy trustee Uniform state legislation ratifies this instinct for private creditor enforcements. But collusive or irregular foreclosure sales or sales that are intended to hinder, delay, or defraud creditors are subject to creditor attack, even though unsecured creditors are not proper parties to the foreclosure process. In such cases, unsecured creditors can cloud the title obtained from foreclosure in the cases of collusion, irregularity or fraudulent intent. This article examines precisely when foreclosure sales can be avoided by unsecured creditors of a debtor who has granted a mortgage or security interest in real or personal property.

Volume

13

Issue

1

First Page

39

Last Page

87

Publisher

American University Washington College of Law

Disciplines

Bankruptcy Law | Law | Property Law and Real Estate

Recommended Citation

David G. Carlson, Foreclosure Sales as Fraudulent Transfers, 13 Am. U. Bus. L. Rev. 39 (2024).
https://larc.cardozo.yu.edu/faculty-articles/827