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The Third Circuit also affirmed. The court found that the attorney never made any misrepresentations to the creditor nor had reason to foresee that the transfer would adversely affect it. The court stated the record failed to indicate that counsel “made any representation or admission to the bank or its attorneys which one would expect that the bank would rely on to its financial detriment.”

Sixty-day Deadline under Rule 4007(C) Is Subject to Equitable Tolling

The Sixth Circuit has ruled that the 60-day deadline set forth in F.R.B.P. 4007(c) to file a dischargeability complaint is not jurisdictional in nature, but rather it is a statute of limitation, or simply a deadline, that is generally subject to the defenses of waiver, estoppel, and equitable tolling. Nardei v. Maughan (In re Maughan), No. 01-4151 (August 14).

Bankruptcy Counsel Not Liable for Debtor's Fraudulent Transfer

In an unreported decision, the Third Circuit has ruled that an attorney's mere assistance of a client in a fraudulent asset transfer is not sufficient cause for liability. In re Yacuk, 02-2926 (August 20).

A husband and wife hired an attorney to transfer their home to their son for $1. The couple told counsel they were making the transfer because their son was paying the household bills. Counsel was told there were no judgments, liens or claims against the couple and he prepared the closing documents. In addition, the attorney also prepared a letter stating that he had not done a title search and could not make any representations with regard to liens or encumbrances. A year later the mortgagee on the property foreclosed on the property and it was sold to a third party. After the husband and wife were sued for fraudulent conveyance in state court, they filed for bankruptcy. The suit was removed to bankruptcy court and the attorney was added as a defendant. The bankruptcy court dismissed the count against the attorney and held the mother, father and son liable for fraudulent conveyance. The district court affirmed.

The Third Circuit also affirmed. The court found that the attorney never made any misrepresentations to the creditor nor had reason to foresee that the transfer would adversely affect it. The court stated the record failed to indicate that counsel “made any representation or admission to the bank or its attorneys which one would expect that the bank would rely on to its financial detriment.”

Sixty-day Deadline under Rule 4007(C) Is Subject to Equitable Tolling

The Sixth Circuit has ruled that the 60-day deadline set forth in F.R.B.P. 4007(c) to file a dischargeability complaint is not jurisdictional in nature, but rather it is a statute of limitation, or simply a deadline, that is generally subject to the defenses of waiver, estoppel, and equitable tolling. Nardei v. Maughan (In re Maughan), No. 01-4151 (August 14).