On September 12, 2019, the United States Court of Appeals for the Third Circuit issued a precedential decision in the matter of In re Hackler. As a precedential decision, it is binding on all federal District and Bankruptcy Court judges in New Jersey, Pennsylvania, and Delaware.
The issue of whether or not someone who lost a property to a New Jersey tax foreclosure may file for bankruptcy and then seek a return of the property either as a preference (or preferential transfer) or as a fraudulent conveyance have been heavily litigated See In re Berley, 492 B.R. 433 (Bankr.D.N.J. 2013), In Re Varquez, 502 B.R. 186 (Bankr.D.N.J. 2014), In re GGI Properties, 568 B.R. 231(Bankr.D.N.J. 2017), later decision at 588 B.R. 401 (Bankr.D.N.J. 2018).
The Hackler decision addressed the preference issue, which appears in 11 U.S.C. §547(b), and ruled that on the facts presented the tax foreclosure was preferential and avoidable. Len Walczyk was counsel for the Debtors and Appellees.
Attachment: Hackler Decision