Ponzi scheme puts Golf Channel in the rough.

Allen Stanford spent close to $6 million advertising his investment firm on the Golf Channel.  After his empire collapsed, the receiver sued the Golf Channel under the Texas fraudulent transfer statute.  The Channel successfully defended in the district court on the ground that it gave reasonably equivalent value.  Janvey v. The Golf Channel, No. 13-11305 (March 11, 2015). Unfortunately for the Channel, because the receiver proved Stanford was running a Ponzi scheme, the question was whether it gave value from the perspective of the creditors, not whether it provided quality advertising from the perspective of Stanford’s business operation.  “Golf Channel argues that its advertising services did not further the Stanford Ponzi scheme and that the $5.9 million reasonably represents the market value of those services. . . . TUFTA makes no distinction between different types of services or different types of transferees, but requires us to look at the value of any services from the creditors’ perspective. We have no authority to create an exception for ‘trade creditors.'”  Accordingly, the Fifth Circuit reversed.