I previously wrote about The Golf Channel case in my article The Fifth Circuit Slices The Golf Channel Into The Pond.
In a nutshell, Ponzi schemer Alan Stanford a/k/a Sir Scam-A-Lot contracted to purchase $5.9 million in advertising from The Golf Channel in connection with a golf tournament that he was hosting, for the purpose of attracting more high net worth suckers into his scheme.
Later, after Stanford's pyramid had collapsed and a Receiver was appointed to clean up his gigantic mess, the Receiver sought to have The Golf Channel disgorge the $5.9 million on the grounds that the advertising provided to Stanford did not have any "utility to creditors", and thus was a fraudulent transfer.
On appeal, the Fifth Circuit initially agreed with the Receiver, in an Opinion that drew significant criticism as not being protective of innocent commercial service providers, which The Golf Channel certainly was. But on The Golf Channel's Motion for Rehearing, the Fifth Circuit gave itself a Mulligan, and this time let the Texas Supreme Court take a swing at the issue by way of certifying the following question to that latter court:
Considering the definition of "value" in section 24.004(a) of the Texas Business and Commerce Code, the definition of "reasonably equivalent value" in section 24.004(d) of the Texas Business and Commerce Code, and the comment in the Uniform Fraudulent Transfer Act stating that "value" is measured "from a creditor's viewpoint," what showing of "value" under TUFTA is sufficient for a transferee to prove the elements of the affirmative defense under section 24.009(a) of the Texas Business and Commerce Code?
As I mentioned in my first article, this is a very important case insofar the Fifth Circuit's original ruling created substantial dangers for innocent businesses that might unwitting deal with a debtor in providing some service.
We can only hope that by taking the advice of the Texas Supreme Court as its caddy, the Fifth Circuit does better on the back nine than it did on the front nine.
Fore!
CITE AS
Janvey v. Golf Channel, Inc., 2015 WL 3972216 (5th Cir. June 30, 2015), certified question accepted (July 17, 2015). Full opinion at https://voidabletransactions.com/2016-golf-channel-texas-opinion-voidable-transactions-and-fraudulent-transfers.html
This article at http://onforb.es/1SKoeqz and http://goo.gl/CfzGHm
