• Weathering the Storm: Good News For Lenders - District Court Reverses TOUSA Fraudulent Transfer Opinion
  • February 18, 2011
  • Law Firm: Haynes Boone LLP - Dallas Office
  • In a welcome bit of good news for lenders, U.S. District Court Judge Gold (Southern District of Florida) reversed the portion of the 2009 bankruptcy court decision in the TOUSA, Inc. bankruptcy cases that had ordered the disgorgement of $403 million plus interest based on the holding that the amounts were received by certain lenders to the TOUSA parent in connection with a pre-petition transaction that constituted a fraudulent transfer. In the same decision, the bankruptcy court also ordered, among other things, (i) the avoidance of obligations, including liens, incurred by certain of the TOUSA subsidiaries (the “Conveying Subsidiaries”) under a $200 million first lien facility (the “First Lien Facility”) and a $300 million second lien facility (the “Second Lien Facility”) and (ii) the disgorgement of principal, interest, and fees paid to the lenders under the First Lien Facility and the Second Lien Facility, but these rulings are the subject of a separate pending appeal.