Tuition as a Fraudulent Transfer

This intriguing Article by David Gray Carlson addresses the trend of bankruptcy trustees suing universities for tuition checks provided by the insolvent parents of adult students under a theory that the university is a recipient of a fraudulent transfer. The author argues that this strategy is misguided, as the university is not the recipient of a fraudulent transfer, but rather, the student is the recipient. This leads the author to conclude that the university was involved in a good faith transfer for value, and thus it should be immune from liability to the bankruptcy trustee or the estate. Of course, this would mean that the student was the recipient of a fraudulent transfer, and thus liable to the trustee for this nondischargeable debt.