Veluchamy v. Bank of America, N.A.

The “senior Veluchamys” earned great wealth in business. They acquired two banks in the 1990s and merged them. When the bank suffered financial problems, the senior Veluchamys personally borrowed and guaranteed loans totaling $40 million from a predecessor of Bank of America (BoA). The loans went into default in 2008. BoA obtained a judgment against the senior Veluchamys in 2010 for over $43 million. The senior Veluchamys filed a bankruptcy petition in 2011. BoA filed an adversary proceeding against them and their children, the “junior Veluchamys”, alleging a scheme to hinder, delay, or defraud creditors by attempting to hide tens of millions of dollars from BoA and other creditors. The bankruptcy court determined the evidence established all of BoA’s major allegations. The district court and Seventh Circuit agreed, rejecting an argument that turnover to the Estate under 11 U.S.C. 542 was not the appropriate remedy regarding $5,500,000 they claim they transferred to a company in India, particularly when that company was not joined as a necessary party. The Seventh Circuit upheld the language of the district court’s judgment requiring turnover of specific jewelry; its decision in holding the junior Veluchamys jointly and severally liable; and decisions concerning specific stock holdings. View "Veluchamy v. Bank of America, N.A." on Justia Law