7th Circuit Shields Casino from Fraudulent Transfer Charge

So-called “red flags” were not “sufficient to impose a duty on [a gambling casino] to investigate” a Chapter 11 debtor’s pre-bankruptcy fraudulent transfers to its insiders who gambled at the casino, held the U.S. Court of Appeals for the Seventh Circuit on Oct. 13, 2015. In re Equipment Acquisition Resources Inc. 2015 U.S. App. LEXIS 17805 at *14 (7th Cir. Oct. 13, 2015). In this article, SRZ partner Michael L. Cook explains the details of the case, which addresses the common problem faced by a third party who receives cash from the defrauding insider, but not from the corporate debtor.