Articles Posted in Preferences

Published on:

The Fifth Circuit Court of Appeals recently issued a decision that should make defendants in Ponzi cases shiver in their boots.  The court said that the defendant, the Golf Channel, had to return nearly $6 million and that it could not take advantage of a commonly-invoked “reasonably equivalent value” defense.  Even though the Golf Channel had aired advertisements promoting the business, which would normally have been “reasonably equivalent value,” the Fifth Circuit held that by airing advertisements promoting the Ponzi scheme, the Golf Channel did nothing to help the Ponzi scheme’s creditors.  But how was the Golf Channel supposed to know that it was dealing with a Ponzi scheme?  For more on the case, and what it means for merchants, read on. Continue reading