Zagaroli (In re Zagaroli), 2020 WL 6495156 (Bankr. Bankruptcy Court for the Western District of North Carolina, the look-back period in avoidance actions under section 544(b) may be much longer-10 years-in bankruptcy cases where the Internal Revenue Service ("IRS") or another governmental entity is the triggering creditor. Indeed, under a ruling recently handed down by the U.S. The longer look-back periods governing avoidance actions under various state laws significantly expand the universe of transactions that may be subject to fraudulent transfer avoidance. One limitation on this avoidance power is the statutory "look-back" period during which an allegedly fraudulent transfer can be avoided-two years for fraudulent transfer avoidance actions under section 548 of the Bankruptcy Code and, as generally understood, three to six years if the trustee or DIP seeks to avoid a fraudulent transfer under section 544(b) and state law by stepping into the shoes of a "triggering" creditor plaintiff. The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to avoid fraudulent transfers is an important tool promoting the bankruptcy policies of equality of distribution among creditors and maximizing the property included in the estate.
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