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Jim Salazar is the majority shareholder of JKL Co. JKL Co. filed for Chapter 11 bankruptcy...

  1. Jim Salazar is the majority shareholder of JKL Co. JKL Co. filed for Chapter 11 bankruptcy on January 1, 2018. Which of the following may be considered a fraudulent transfer?
  1. Transfer of fixed assets to Jim’s brother John on December 15, 2017
  2. Transfer of land to Jim’s sister Alice on July 1, 2016
  3. Sale of inventory at regular price to a new customer on February 15, 2018
  4. Transfer of inventory to a subsidiary for less than fair value on August 1, 2016
  5. Both a and c are correct
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Answer #1

Answer: a. Transfer of fixed assets to Jim’s brother John on December 15, 2017

Reason: Because as per chapter 11 Bankruptcy code, any property transferred to insider i.e, relatives, general partners, and directors or officers of the debtor to avoid payment to creditors within 90 days before filing the petition will be treated as fraudulent transfer.

so here only option A will fall in this categories.

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