Fourth Circuit Affirms Lender’s Good Faith in Fraudulent Transfer Case

The U.S. Court of Appeals for the Fourth Circuit recently affirmed the dismissal of a bankruptcy trustee’s fraudulent transfer complaint against a “warehouse” lender who had been paid by a distressed home mortgage originator several months prior to the originator’s bankruptcy. Affirming the lower courts, the Fourth Circuit in Gold v. First Tennessee Bank,N.A., held that “the bank accepted the payments” from its borrower “in good faith.” In this article, SRZ partner Michael L. Cook analyzes details of the court’s decision.