In Meoli v. Huntington Nat’l Bank, the Sixth Circuit affirmed a multi-million judgment against The Huntington National Bank stemming from a bankruptcy trustee’s lawsuit seeking to recover fraudulent transfers from a debtor company’s operation of a Ponzi scheme. The opinion discussed several aspects of fraudulent transfer and recovery law, including the following: (i) that the dominion-and-control test is used to determine transferee liability for both an initial transferee and subsequent transferee; (ii) a bank account holder’s right to withdraw money from a deposit account prevents a bank from exercising dominion-and-control; (iii) in evaluating a fraudulent transferee’s defenses, a court should perform a “holistic factual determination of whether a reasonable person, given the available information, would have been alerted to the transfer voidability;” and (iv) the Court refused to articulate whether the standard for measuring “good faith” is a subjective or objective standard. The case citation is 2017 U.S. App. LEXIS 2248 (6th Cir. Feb. 8, 2017).
