Fraudulent Transfer Allegations Against Bank in Check Kiting Scheme Sufficient

A Chapter 7 trustee’s allegations against a defendant bank for alleged fraudulent conveyances and transfers through a check kiting scheme are sufficient at this stage of the proceeding, a federal district court held Feb. 19 (Welch v. Highlands Union Bank, 2015 BL 42353, W.D. Va., 1:14-cv-00063-JPJ-PMS, 2/19/15).

Judge James P. Jones denied Highlands Union Bank’s motion for judgment on the pleadings, concluding that further factual development is necessary for the court to rule on potentially diverse outcomes that may occur under Virginia or Florida law.

According to the court, the choice of law issues raised in this ...