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Under the relevant Delaware statute,79 creditors of Trenwick America were

entitled to attack the reorganization on the grounds that:

(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation: (1) With actual intent to hinder, delay or defraud any creditor of the debtor; or (2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:

a. Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or

b. Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due. 80

Likewise, the Bankruptcy Code permits fraudulent transfer actions to be brought

under sections 544(b) or 548.81 Section 544(b) allows a trustee or debtor-in-possession to

bring an action to avoid any transfer of an interest in property that a creditor may avoid

under applicable state law.82 Similarly, § 548 allows a trustee or debtor-in-possession to

commence a federal fraudulent conveyance action to avoid certain transfers made or

incurred within two years before the date of the filing of the bankruptcy petition.83 More

specifically, § 548 allows the trustee to avoid any transfer made for less than reasonable

equivalent value and made at a time when the transferor was insolvent, engaged in a

continue to follow the old common law standards based on “badges of fraud.” Jonathan C. Lipson, J. BANK. L. & PRAC. 101, 111 (2002).

, 11

79 80 81 82 83 6 6 § 1301, . § 1304(a). . 11 U.S.C. §§ 544(b), 548. 11 U.S.C. § 544(b). 11 U.S.C. § 548. At the time Trenwick America filed its bankruptcy petition, the reach-back period for enforcement under § 548 was only one year.

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