Bankruptcy

• Author: International Law Group

Plaintiff-appellant is the trustee in a Japanese bankruptcy proceeding concerning Grandote Country Club Ltd. Plaintiff seeks to gain title to a golf course in Colorado by invalidating the transfer of ownership, arguing that it was fraudulent and that a later tax sale was invalid under the Colorado Uniform Fraudulent Transfer Act (hereinafter CUFTA) [Colo. Rev. Stat ß 38-8-101 to 38- 8-112]. The district court granted summary judgment, and the U.S. Court of Appeals for the Tenth Circuit affirms.

The trustee first argued that Japanese law should govern the case. The Court disagrees, holding that because the dispute involves real property, application of local law is appropriate. "Moreover, both federal and state choice of law principles favor application of the 'law of the jurisdiction having the greatest interest in the litigation'... Without question, Colorado has the greatest interest in the litigation: the property is located in Colorado, the tax sale was conducted for failure to pay Colorado taxes, most of the agreements related to the property were executed in Colorado, and there has been extensive litigation in Colorado courts to determine the owner of the property." [Slip op. 9-10]

A second contention was that the issuance of title violated CUFTA. The Court holds that "[a] a transfer is...