Ivey v. First Citizens Bank & Trust Co.

The Chapter 7 trustee of James Edwards Whitley's estate challenges the district court's affirmance of the bankruptcy court's grant of summary judgment for the Bank on the trustee’s claim that certain deposits and wire transfers to Whitley’s personal checking account at the Bank are avoidable as fraudulent transfers. The court found that the transactions at issue do not constitute transfers within the meaning of the Bankruptcy Code. The court explained that when a debtor deposits or receives a wire transfer of funds into his own unrestricted checking account in the regular course of business, he has not transferred those funds to the bank that operates the account. When the debtor is still free to access those funds at will, the requisite “disposing of” or “parting with” property has not occurred; there has not been a “transfer” within the meaning of 11 U.S.C. 101(54). Accordingly, the court affirmed the judgment. View "Ivey v. First Citizens Bank & Trust Co." on Justia Law