Opinion
No. 76-B-1659
February 9, 1979
Alleged Fraudulent Transfers — Jurisdiction — Summary-Plenary Dichotomy
A bankruptcy court, currently exercising summary jurisdiction based upon a trustee's suit to recover property alleged to have been fraudulently transferred, has no jurisdiction over property not actually or constructively owned by the trustee. In the instant case, property that was owned by third parties under a non-frivolous claims, namely, funds transferred by the bankrupt to other defendants, are not within the reach of the trustee's actual or constructive possession, and therefore, the ownership of them cannot be decided in a summary proceeding. However, the question of the validity of liens held by some of the defendants on the real property owned by the bankrupt is a matter appropriate for summary treatment, in that the trustee is in possession of the realty in question. See Sec. 23a at ¶ 2227.