Balaber-Strauss v. Sixty-Five Brokers (In Re Churchill Mortgage Investment Corp.)

How courts have described this case

Verbatim parenthetical descriptions written by other courts when citing this decision. Ranked by citation-network relevance.

• noting the general rule that distributions in excess of principal constitute fraudulent transfers subject to avoidance
• noting “the universally‐ 5 accepted rule that investors may retain distributions from an entity engaged in a 6 Ponzi scheme to the extent of their investments, while distributions exceeding 7 their investments constitute fraudulent conveyances”
• \[T]he Brokers in these cases were hired and paid to produce mortgages or investors. They produced and thereby gave value....\
• third-party mortgage and investment brokers were paid commissions proportionate to “commissions that would normally be paid for such services in the marketplace”
• “It is also assumed that the Brokers had no knowledge of the Ponzi scheme, and that the Brokers’ own activities were not unlawful or wrongful in any respect.”
• “Nor shall this decision prejudice the Trustee’s right to assert fraudulent conveyance claims based upon evidence showing that commissions were paid (for example, to insiders) that exceeded the value of broker services.”

Source: CourtListener parenthetical corpus (CC0).