Templeton v. O'Cheskey (In Re American Housing Foundation)

How courts have described this case

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

• holding that a business was not a Ponzi scheme where it “engaged in substantial legitimate business,” despite the fact that “a portion of the funds collected . . . was used to pay Ponzi-like returns to investors”
• holding Ponzi-scheme ordinary-course-of-business presumption did not apply to preferential transfer claim where traditional Ponzi scheme was not proved and business engaged in legitimate commercial enterprise
• noting that we may affirm the dismissal of a complaint “on any basis supported by the record” (quoting Davis v. Scott, 157 F.3d 1003, 1005 (5th Cir. 1998))
• stating general principle under corporate and bankruptcy law that creditors are paid before shareholders
• looking to Texas law to recharacterize and subordinate purported debt as equity, notwithstanding that¸ inter alia, the deals at issue provided for a guaranteed rate of return and redemption rights, because other factors supported characterization as equity
• “[T]he practical effect of subordinating Templeton’s claim to Class 18 is that Templeton will receive nothing . . . .”

Source: CourtListener parenthetical corpus (CC0).