Opinion
Bankruptcy No. C-276-73
January 5, 1978
Estates — Title to Property — Viodable Transfers — Action by Trustee
Acting for and on behalf of customers, a trustee for a brokerage firm in liquidation has an implied right of action to void transfers of subordinated securities made in violation of the Securities Exchange Act's net capital rule. Section 70(e) of the Bankruptcy Act grants to the trustee the broad power to challenge any transfer made or offered or obligation incurred by a bankrupt while "under any Federal or State law applicable thereto is fraudulent as against, or voidable for any other reason by any creditor of the bankrupt." The customer was intended to be the principal beneficiary of the net capital requirements. Further, under state law, the customers were intended beneficiaries of the subordination agreement and could bring an action as third party beneficiaries of the agreement to recover payments made in violation of its provisions. See Sec. 70(e) [§ 544(b)] at ¶ 9523.