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In a major victory for Jenner & Block client Daniel Freeland, the Chapter 7 Bankruptcy Trustee of Consolidated Industries Corporation, the U.S. Court of Appeals for the Seventh Circuit last week affirmed in substantial part a large judgment for the Trustee.
The court found that Consolidated Industries had made actual fraudulent transfers to its former owner, Enodis Corporation, at a time when Consolidated Industries was insolvent and facing significant exposure for products liability and other claims arising out of defective furnaces it manufactured and sold.
The court affirmed over $40 million of the judgment, with the remainder remanded for additional findings. The court also vacated a judgment entered for the defendants on the Trustee's alter ego claims and remanded for further proceedings, which may allow the Trustee to obtain significant additional monies.
Partners Catherine L. Steege, Joel T. Pelz and Ronald R. Peterson, with assistance from Associate Christine L. Childers, successfully handled the trial court matters on behalf of the Trustee. Partner Barry Levenstam and Associate David H. Hixson assisted with the appeals, and Partner Carter H. Klein helped secure the judgments by negotiating the terms of a letter of credit.