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instances where even the big three defenses are not raised to a defendant's detriment. A decision of the Eleventh Circuit from last year points to the fact that as defense counsel it is critical to raise all possible defenses, even if prior judicial opinions within your district indicate that such defense may not apply. In re Finance Federated Title & Trust, Inc., 309 F.3d 1325 (11th Cir. 2002). In Finance Federated, the trustee sought to avoid fraudulent conveyances made pursuant to an alleged Ponzi scheme. The defendant raised as an affirmative defense that she took the transfers "for value and in good faith" pursuant to § 548(c). The plaintiff argued that established case law held prevented a participant in an alleged Ponzi scheme from relying on the good faith affirmative defense to an avoidance action. Based on the reported precedent, the bankruptcy court and district court agreed with the plaintiff. The defendant appealed to the Eleventh Circuit. The Eleventh Circuit reversed, holding that defendant was not barred as a matter of law from asserting the affirmative defense that she received the transfers "for value and in good faith." The important emphasis is that the defendant must raise all possible defenses that may exist. If defendant's counsel in Finance Federated had relied on the established case law that the plaintiff (and the bankruptcy court and district court) found persuasive, and not raised the defense, the defendant would have missed an opportunity to limit her exposure.
Another fertile area of attack for a defendant in an avoidance action is to raise barriers to the plaintiff's action. These include (1) standing to pursue the action; (2) lack of benefit to the estate; and (3) res judicata. The Third Circuit, en banc has confirmed its position (contrary to an earlier withdrawn panel opinion) that a creditors' committee has derivative standing to prosecute an avoidance action. Official Committee of Unsecured Creditors of Cybergenics Corporation v. Chinery, 330 F.3d 548 (2003). Even though the initial panel decision holding otherwise was withdrawn, the earlier analysis in opposition to derivative standing may prove helpful in other circuits. In the initial opinion, the panel concluded that the plain language of the statute, read in conjunction with the Supreme Court's interpretation of § 506(c) in Hartford
