In Re Fancy, a businessman knew that he was facing substantial losses from pending litigation. Shortly before declaring bankruptcy, he transferred his interest in the matrimonial home to his wife. What was the result?
A) The Court reversed the transfer, because it was unnecessary: The wife would automatically receive the matrimonial home once the bankruptcy took effect.
B) The Court allowed the transfer, determining the wife was not a co-conspirator.
C) The Court allowed the transfer, because transfers between spouses are exempt under the Bankruptcy and Insolvency Act.
D) The Court reversed the transfer, determining it was a prohibited settlement under the Bankruptcy and Insolvency Act.
E) The Court declined to exercise jurisdiction because a bankrupt has no status to appear in court.

Question

Quizplus · Accepted Answer

The Court reversed the transfer, determining it was a prohibited settlement under the Bankruptcy and Insolvency Act, as it was likely seen as an attempt to shield assets from creditors in anticipation of bankruptcy.

In Re Fancy, a Businessman Knew That He Was Facing