Thinking of filing a personal chapter 7 bankruptcy and having the chapter 7 trustee sell that nasty fraudulent transfer suit [where you will be the defendant] to your brother in law? Well, the 9th Cir. BAP decided two days ago that this was not something that could be done, at least not without some serious Court scrutiny. In this matter, the debtor, soon to be defendant, had the Trustee agree to sell a cause of action which belonged to the estate [itself an interesting event, but allowable in the Ninth Circuit] to a newly established company [named "Claims Prosecutor, LLC"]. The Court of Appeals noted first that the name of the purchaser was ironic, in that it should have been named the “Claims Extinguisher” since the owner was the defendant’s brother in law and he openly stated that he had no intention of pursuing the case. The trouble with this idea, according to the appellate court, was that the Bankruptcy Court approved the sale over creditor objections without first carefully reviewing whether the sale was “fair and equitable” and did not consider whether the objecting creditor might be willing to pursue the suit for the benefit of all creditors, a common procedure in situations where the estate does not have the money to pursue the cause of action itself. Here is a link to the case: http://www.ce9.uscourts.gov/Web/bap.nsf/46DD4CD27C4623C48825700700763D1F/$file/Lahijani-04-1350.pdf?openelement

Mike