Clever Structuring Won't Save A Fraudulent Transfer In The Seventh Circuit

In a recent decision, Continental Casualty Co. v. Symons,¹ the Seventh Circuit Court of Appeals made clear that the structure of a transaction will not save it from being set aside as a fraudulent transfer if the facts warrant the transaction's avoidance.  The court affirmed the United States District Court, which quashed an attempt by the owners of a family of companies to skim value from a creditor and instead direct that value to themselves.  In its decision, the Circuit Court clearly evidences its willingness to look at substance over form, and to use the theory of alter ego and veil piercing as a compliment to fraudulent transfer law to reach shareholders who orchestrate an avoidable transaction.