Quimbee logo
DMCA.com Protection Status

In Re TOUSA, Inc.

680 F.3d 1298 (2012)

Case BriefRelatedOptions
From our private database of 32,200+ case briefs...

In Re TOUSA, Inc.

United States Court of Appeals for the Eleventh Circuit

680 F.3d 1298 (2012)

Facts

Homebuilding giant TOUSA, Inc. (debtor) grew rapidly by acquiring homebuilder subsidiaries. To finance its acquisitions, TOUSA issued more than $1 billion in bonds guaranteed by its subsidiaries and drew on a Citicorp revolving line of credit. When the housing market collapsed, a joint venture that TOUSA had entered to acquire homebuilding assets from Transeastern Properties, Inc. (Transeastern) defaulted, and the lenders who financed the acquisition sued TOUSA. TOUSA settled for over $421 million, financed by borrowing another $500 million that Citicorp agreed to syndicate from new lenders, secured by liens conveyed by TOUSA subsidiaries (the conveying subsidiaries) (debtors). Citicorp transferred the funds to a TOUSA title company, which wired the funds to a Transeastern agent who disbursed $421 million to the Transeastern lenders and the rest to pay professional and advisory fees. At that point, TOUSA owed $1.061 billion on its bond debt and $224 million on its revolving loan. Six months later, TOUSA and its conveying subsidiaries filed for bankruptcy reorganization. The Unsecured Creditors’ Committee (UCC) brought an adversary proceeding to avoid the transfer to the Transeastern lenders and recover the liens’ value. The parties agreed the conveying subsidiaries were insolvent, undercapitalized, or unable to pay debts at the time of the transfer but disputed whether they received reasonably equivalent value in exchange for the liens. The Transeastern and new lenders argued the conveying subsidiaries received equivalent value because of the economic benefit of avoiding default and bankruptcy. The bankruptcy judge avoided the transfer as fraudulent and ordered the lenders to disgorge the loan proceeds. The lenders appealed, and the district court reversed. The UCC appealed.

Rule of Law

Issue

Holding and Reasoning (Pryor, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 585,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 585,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 32,200 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 585,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 32,200 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership