Yesterday, the United States Court of Appeals for the Eleventh Circuit upheld the decision of the Bankruptcy Court for the Southern District of Florida holding that liens granted by subsidiaries of a borrower to refinance obligations owed to the borrower’s lenders constituted fraudulent transfers under section 548(a)(1) of the Bankruptcy Code with respect to those lenders. In reversing the district court’s decision, the Eleventh Circuit held that the bankruptcy court did not clearly err when it found that subsidiaries of TOUSA (referred to in the opinion as the “Conveying Subsidiaries”) that granted liens to new lenders to refinance obligations of existing lenders (referred to in the opinion as the “Transeastern Lenders”) did not receive reasonably equivalent value in exchange for the granting of such liens. The Eleventh Circuit also held that the bankruptcy court correctly ruled that the Transeastern Lenders were entities “for whose benefit” the liens were transferred under section 550(a)(1) of the Bankruptcy Code.