Court Rules Mere Conduit Defense Not Suitable for a Motion to Dismiss

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November 14, 2024

Court Rules Mere Conduit Defense Not Suitable for a Motion to Dismiss

The Bankruptcy Strategist

At the motion to dismiss stage, courts usually won't consider affirmative defenses. This issue arose recently in a preferential transfer case, where a defendant sought to dismiss a complaint by arguing it was a mere conduit, not an initial transferee. But the court ruled against the defendant, explaining why it would not adjudicate a mere conduit defense on a motion to dismiss. Official Comm. of Unsecured Creditors of Pack Liquidating, LLC v. Kepler Grp., LLC, Adv. Proc. No. 23-50536 (In re Pack Liquidating, LLC), Case No. 22-10797, 2024 Bankr. LEXIS 2444 (Bankr. D. Del. Oct. 4, 2024).

To continue reading Daniel A. Lowenthal's article in The Bankruptcy Strategist, please click here.

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