Title In re: Forest Capital, LLC, 16-13850
Michelle M. Harner

In re: Forest Capital, LLC, 16-13850 Adversary Case: Forest Capital, LLC. v. Fischer Porter & Thomas, P.C., et al., 16-00337 Counsel for Debtor: Jeremy S. Friedberg Counsel for Fischer Porter & Thomas, P.C. et al.: Andrew L. Cole

This adversary proceeding requires the Court to evaluate both the avoidance of an alleged postpetition transfer and the transferee’s liability for the same if the transferee asserts a valid and perfected lien in the transferred property. Specifically, the Defendant made a postpetition transfer of property in the amount of $25,000.00 to itself in payment of certain prepetition legal fees. The Plaintiff asserts that the postpetition transfer constitutes an avoidable transfer under section 549 of the Bankruptcy Code and is moving for partial summary judgment on that basis. The Defendant’s opposition to that motion turns largely on section 550 of the Bankruptcy Code and the reasoning of In re C.W. Min. Co., 477 B.R. 176 (B.A.P. 10th Cir. 2012). The Bankruptcy Court, Michelle M. Harner, Judge, held that, based on the existing record, the Defendant had not established a valid and enforceable attorney’s lien under applicable state law. The Court further determined that the Defendant received the postpetition transfer in violation of section 549 of the Bankruptcy Code. The Court did not, however, direct repayment of the postpetition transfer, as the Plaintiff’s motion did not seek such relief and the Court found genuine issues of material fact relating to that issue.