The equitable remedy of constructive trust is employed when “property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest,” and therefore equity converts him into a trustee.
The Trouble with Constructive Trusts
The equitable remedy of constructive trust is employed when "property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest," and therefore equity converts him into a trustee. <i>In re Koreag, Controle et Revision S.A.</i>, 961 F.2d 341, 353 (2d Cir. 1992). This legal theory arises in bankruptcy cases when a non-debtor party with a pre-petition contract, which ostensibly grants such party an ownership interest in funds or which establishes an agency relationship with a debtor, seeks, in the bankruptcy case, to assert its ownership rights to the funds held by the debtor.
By
Harold D. Jones And Adam P. WofseThis premium content is locked for The Bankruptcy Strategist subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN The Bankruptcy Strategist
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already have an account? Sign In Now
For enterprise-wide or corporate access, please contact Customer Service at [email protected] or call 1-877-256-2473.
