Bankruptcy Trustee Can’t Recover Gift to Church As Conduit for Charity
Church was not considered “initial transferee” when funds were specifically earmarked for third party
A bankruptcy trustee seeking to recover a $62,500 contribution from a Ponzi scheme cannot recover from the church to which the funds were given when the church was merely a conduit for the gift to a third-party charity. A Bankruptcy Court in Florida has dismissed the trustee’s claim when the church acted in good faith and passed the funds on as required. ( In Re: Engler, Tardif v. St. John the Evangelist Catholic Church , No. 9:08-bk-04360, 7/17/13 .)
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