PHOENIX, Ariz. (May 19, 2020) – On April 16, 2020, the U.S. Bankruptcy Court for the District of Arizona entered judgment in favor of MorrisAnderson as Litigation Trust for Swift Air.
Six months before its Chapter 11 filing, the former principals of Swift Air transferred $12,136,669 in accounts receivable to insiders in satisfaction of debts to affiliates. The court avoided the transfers and granted judgment against the initial and subsequent recipients of those transfers.
After satisfying the obligations to insiders, ownership of the airline was sold for $100. Last summer the Arizona Supreme Court accepted a certified question and found that the insiders owed fiduciary duties to the LLC., In re Sky Harbor Hotel Properties, Inc. 246 Ariz. 531 (201). The bankruptcy court found the transfer violated those fiduciary duties and issued its report and recommendation that final judgment also be entered for breach of fiduciary duty.
MorrisAnderson as Litigation Trust was represented by Dale C. Schian of Gallagher & Kennedy with support from Kim M. Maerowitz of Maerowitz Law Firm.
The case is MorrisAnderson & Associates, Ltd. v. Redeye II, LLC, et al. (In re Swift Air, LLC), Case Number 2:12-bk-14362-DPC, Adversary Number 2:14-ap-00534-DPC, in the U.S. Bankruptcy Court for the District of Arizona.