David Forster, et al., Respondents,

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-0459

David Forster, et al.,
Respondents,

vs.

Enid Theis, et al.,
Defendants,

Dougherty & Associates Financial Advisors, LLC, et al.,
Appellants.

Filed December 18, 2017
Affirmed
Kirk, Judge

Wright County District Court
File No. 86-CV-15-4902

Christopher P. Parrington, Andrew R. Shedlock, Kutak Rock , LLP, Minneapolis, Minnesota
(for respondents)

Richard C. Landon, Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota;
Andrew J. Steil, Christopher W. Harmoning, Gray, Plant, Mooty, Mooty & Bennett, P.A., St.
Cloud, Minnesota; and Sheldon R. Brown, Young & Brown, LLP, Annandale, Minnesota (for
appellants)

Considered and decided by Florey, Presiding Judge; Rodenberg, Judge; and Kirk,
Judge.
S Y L L A B U S
Once a bankruptcy action is closed , and a bankruptcy trustee’s exclusive authority to
pursue a claim on beh alf of the bankruptcy estate under the federal bankruptcy code has
expired, an unsecured creditor may pursue a fraudulent -transfer voidance claim in district

2
court to the extent permissible under state law , so long as the bankruptcy trustee has not
affirmatively acted to reopen the action in bankruptcy court.
O P I N I O N
KIRK, Judge
In this interlocutory appeal from the district court’s denial of summary judgment in a
fraudulent-transfer action, appellants, third-party transferees of business ownership and real
property interests from a bankruptcy debtor and his wife, argue that respondents, unsecured
creditors of the bankruptcy debtor, are barred from pursuing a fraudulent-transfer voidance
claim against them in district court under the Minnesota Uniform Fraudulent Transfer Act
(MUFTA).1 Appellants maintain that a bankruptcy trustee has exclusive standing to pursue
fraudulent-transfer voidance actions under the federal bankruptcy code on behalf of the
bankruptcy estate, and that the bankruptcy court has exclusive subject -matter jurisdiction to
hear such actions to the exclusion of individual unsecured creditors.
Because the bankruptcy action is closed and the b ankruptcy trustee has not acted to
reopen the action in bankruptcy court, we conclude that the district court now has subject-
matter jurisdiction to hear an unsecured creditor’s fraudulent -transfer voidance action to the
extent the claim is allowed under applicable state law. We affirm.

1 In 2015, the Minnesota Uniform Fraudulent Transfer Act was amended and renamed the
Minnesota Uniform Voidable Transactions Act. See Minn. Stat. §§ 513.41-.51 (Supp. 2015).
The amended statute does not apply to this case because the challenged transfers occurred
before August 1, 2015, when the amended statute took effect . See 2015 Minn. Laws ch. 17,
§ 13, at 164; see also Braylock v. Jesson , 819 N.W.2d 585, 588 (Minn. 2012) (“When the
Legislature merely clarifies preexisting law, the amended statute appl ies to all future or
pending litigation. If, on the other hand, the amendment changes preexisting law, the
amendment is not retroactive unless the Legislature states otherwise.” (citations omitted)).

3
FACTS
Codefendant b ankruptcy debtor David Theis and co -appellant business owner and
third-party transferee Michael Dougherty are former business partners. In 1995, they formed
Theis and Dougherty Financial Services , Inc. (T&D), a financial-services business out of
which they conducted investment advising and brokerage activities. In 1999, they formed
DM Management Group , LLP (DM), a real -estate business, and in 2001 they formed
Securities Monitoring Group, LLC (SMG), an investment-advisory firm . The three
businesses were operated out of an office building originally ow ned by DM in Buffalo,
Minnesota. Michael Dougherty and David Theis ended their formal business partnerships
around May 2012, and sometime thereafter, Michael Dougherty started a new business, co-
appellant business Dougherty & Associates Financial Advisors, LLC (D&A).
Around 2008, r espondents unsecured creditors , David and Sandra Forster (the
Forsters), became clients of David Theis and T&D. On the advice of David Theis, the Forsters
made $415,000 in investments that ultimately resulted in significant financial losses. In April
2009, David Theis began receiving complaints from the Forsters and other clients about his
advice. In February 2012, t he Forsters filed an arbitration action against David Theis with
the Financial Industry Regulatory Authority (FINRA), claiming that he gave them fraudulent
advice in recommending investments. In March 2013, the FINRA arbitration panel ruled in
favor of the Forsters and awarded them $290,000. On August 20, 2013, the Forsters’ FINRA
award, plus interest, was converted into a judgment in district court.
On October 14, 2013, David Theis filed for bankruptcy with the U.S. Bankruptcy Court
for the D istrict of Minnesota. In his bankruptcy petition , and in his statement of financial

4
affairs accompanying the petition, David Theis listed the Forsters’ FINRA j udgment as an
unsecured nonpriority claim. In August 2014, the bankruptcy court excepted from discharge
the Forsters’ judgment against David Theis in the bankruptcy action under 11 U.S.C.
§ 523(a)(4) (2014). The trustee for David Theis’s bankruptcy estate filed the final accounting
on January 23, 2015, and the bankruptcy action was closed on April 21, 2015.2
In an attempt to collect payment from David Theis on their FINRA judgment , the
Forsters engaged in post-judgment discovery in district court. The Forsters uncovered several
transfers of business ownership and real property interests made by David Theis to his wife,
Enid Theis,3 to Michael Dougherty, or to Michael Dougherty’s wife, Correen Dougherty,4 and
subsequent transfers made by Enid Theis of some of those interests. The Forsters alleged
these transfers to be fraudulent, and on October 2, 2015, they filed a fraudulent-transfer
voidance claim in Wright County district court against David and Enid Theis, Michael
Dougherty, and D&A under MUFTA. Minn. Stat. §§ 513.44, .45 (2014). The Forsters
challenged the following transfers , the first six of which o ccurred before David Theis filed
for bankruptcy in October 2013:5

2 The Forsters cite the closing date as April 21, 2015 in their brief, and Michael Dougherty
and D&A do not dispute this date. Both parties concede that the bankruptcy action was closed
before the Forsters filed their MUFTA claim in district court on October 2, 2015. Thus, we
rely on April 21, 2015, as the closing date for David Theis’s bankruptcy action.
3 David and Enid Theis are codefendants in this action but minimally participated in the
district court’s proceedings and did not take part in this appeal.
4 Correen Dougherty is not a party to this action.
5 The facts recited in this opinion, including the dates of and parties to each transfer, are
supported by the record. To the extent that the district court made alternative findings, we
rely only on those findings supported by the record for the purposes of this appeal.

5
1. On December 31, 2009, David Theis transferred his 50%
partnership interest in DM to Enid Theis as a “gift.”

2. On May 15, 2012 , David Theis sold his 50% partnership
interests in T&D (for $14,200) and SMG (for a promised
$1) to Michael Dougherty.

3. On May 19, 2012 , David Theis transferred his 50% co-
ownership interest in real property in Idaho to Enid Theis.

4. In 2013, Enid Theis sold the interest in the Idaho property
to the property’s co-owner, J.B., for approximately
$30,000.

5. On June 26, 2013, David and Enid Theis and Michael and
Correen Dougherty transferred title to property in
Annandale, Minnesota to Correen Dougherty for total
consideration of $500 or less.

6. On July 10, 2013 , Enid Theis sold the interest in DM to
Correen Dougherty and to J.W., a business tenant at the
Buffalo office building for $214,000. The sale of DM
included the Buffalo office building.6

7. On June 2, 2014, David Theis transferred his 50% interest
in the Buffalo marital home to Enid Theis for $500.

Michael Dougherty and D&A, and the Forsters , filed cross-motions for s ummary
judgment in September 2016, which the district court denied on January 25, 2017. On January
26, Michael Dougherty and D&A submitted a letter to the district court requesting to file a
motion to reconsider, and in relevant part, asking the court to address the issues of standing
and subject-matter jurisdiction. The district court subsequently issued an order on February
3, substantively addressing the jurisdictional issues. In its February 3 order, the district court

6 Respondents list the transfer of the Buffalo office building in their complaint as fraudulent,
but neither the parties nor the district court addressed the sale as a separate transfer from the
sale of DM. We do the same for the purposes of this appeal.

6
held that it had subject-matter jurisdiction to hear the Forsters’ MUFTA claim, and that the
Forsters had standing to bring their claim under state law . Michael Dougherty and D& A
appeal the district court’s jurisdictional rulings.7
ISSUE
Did the district court err in concluding that it had subject -matter jurisdiction to hear ,
and that the Forsters had standing to bring, a fraudulent-transfer voidance claim under state
law?
ANALYSIS
I. The district court has subject -matter jurisdiction to hear the Forsters’
fraudulent-transfer voidance claim because the Forsters filed their claim in
district court after the bankruptcy action was closed.

a. The general rule does not apply because the bankruptcy action is closed.

Michael Dougherty and D&A contend that under the federal bankruptcy code the
bankruptcy court has exclusive subject -matter jurisdiction to hear fraudulent -transfer
voidance actions and that the authority to void the challenged transfers rests exclusively with
the bankruptcy trustee to pursue on behalf of the bankruptcy estate, even after the bankruptcy

7 Generally, a party cannot immediately appeal an order denying a motion for summary
judgment unless “the [district] court certifies that the question presented is important and
doubtful.” Minn. R. Civ. App. P. 103.03(i); Kastner v. Star Trails Ass’n, 646 N.W.2d 235,
238 (Minn. 2002). However, certain orders are immediately appealable under Minn. R. Civ.
App. P. 103.03(j), even without such certification. Kastner, 646 N.W.2d at 238. This includes
orders denying summary -judgment motions based on subject -matter jurisdiction. See
McGowan v. Our Savior’s Lutheran Church, 527 N.W.2d 830, 833 (Minn. 1995).

7
estate is closed. The Forsters argue that because the bankruptcy action is closed, they have
exclusive authority to pursue their claim under MUFTA in state district court.8
It is well settled that the bankruptcy trustee is the representative of a bankruptcy estate
and “has capacity to sue and be sued.” 11 U.S.C. § 323 (2014); Leffler v. Leffler, 602 N.W.2d
420, 42 2 (Minn. App. 1999). Once a bankruptcy petition is filed, “all legal or equitable
interests of the debtor in property as of the commencement of the case” become property of
the bankruptcy estate, including any causes of action that have accrued to the debtor. Leffler,
602 N.W.2d at 422 (discussing 11 U.S.C. § 541(a)(1) (2014)). While a bankruptcy action is
pending, the bankruptcy trustee may act on behalf of the bankruptcy estate to void fraudulent
transfers of the bankruptcy debtor’s interests in property that were made before the bankruptcy
action was filed. See 11 U.S.C. §§ 548(a)(1), 544(b)(1) (2014).
First, pursuant to 11 U.S.C. § 548(a)(1), a bankruptcy trustee may void a fraudulent
transfer made on or within two years of the bankruptcy petition being filed. Second, pursuant
to 11 U.S.C. § 544(b)(1), a bankruptcy trustee may void a pre -petition transfer of the
bankruptcy debtor’s interest in property if an unsecured creditor of the bankruptcy estate
would have had an allowable claim to void the transfer, even in part, under applicable state
or federal law. In re DLC, Ltd., 295 B.R. 593, 601, 602 (B.A.P. 8th Cir. 2003), aff’d sub nom.
Stalnaker v. DLC, Ltd., 376 F.3d 819 (8th Cir. 2004).

8 The Forsters also argue that the bankruptcy trustee lacks the capacity to sue in district court
but the Forsters’ argument is irrelevant to the jurisdictional issues presented to this court on
appeal. Thus, we decline to address their capacity-related arguments.

8
In turn, MUFTA provides a fraudulent -transfer voidance claim to an unsecured
creditor of a debtor under state law. See Minn. Stat. § 513.44(a)(1) (2014). In an action for
relief, an unsecured creditor may void a fraudulent transfer “to the extent necessary to satisfy
the creditor’s claim.” Minn. Stat. § 513.47(a)(1) (2014). If a transfer is voidable by a n
unsecured creditor under section 513.47(a)(1), the creditor may recover the value of the asset
transferred, or the amount necessary to satisfy its claim, whichever is less, from the first
transferee or a person for whos e benefit the transfer was made, or from any subsequent
transferee other than one who took in good faith. Minn. Stat. § 513.48(b)(1), (2) (2014).
While a bankruptcy action is pending, if an unsecured creditor of a bankruptcy debtor
has an allowable claim to void a fraudulent transfer under MUFTA or other applicable state
law, federal bankruptcy code section 544(b)(1) provides that the trustee of a bankruptcy estate
may act to void the entire fraudulent transfer in the bankruptcy action on behalf of the
bankruptcy estate and all of its creditors . If a bankruptcy trustee voids a fraudulent transfer
under federal bankruptcy code sections 544 (b)(1) or 548(a)(1), the trustee may recover, for
the benefit of the estate, the value of the property from the initial transferee or beneficiary, or
from any immediate or mediate transferee of the initial transferee, other than a transferee who
took for value or who took in good faith. 11 U.S.C. § 550(a), (b) (2014).
“As a general proposition it is well settled that [fraudulent] transfers may only be
avoided [in a bankruptcy proceeding] by a trustee .” In re Foster, 516 B.R. 537, 541 (B.A.P.
8th Cir. 2014), aff’d, 602 Fed. Appx. 356 (8th Cir. 2015). After a bankruptcy petition is filed,
only the trustee has standing to exercise the voidance power granted in bankruptcy court. See
In re Michener , 217 B.R. 263, 270 (Bankr. D. Minn. 1998). “‘The trustee’s single effort

9
eliminates the many wasteful and competitive suits of individual creditors’ and ‘protect[s] the
creditors from one another. ’” Greenpond S., LLC v. Gen. Elec. Capital Corp. , 886 N.W.2d
649, 655 (Minn. App. 2016) (quoting Koch Refining v. Farmers Union Cent. Exch., Inc., 831
F.2d 1339, 1342-43 (7th Cir. 1987) (quotation omitted)), review granted (Minn. Jan. 17, 2017)
and order granting review vacated (Minn. Sept. 27, 2017).
The parties recognize the general rule under the federal bankruptcy code that while a
bankruptcy action is pending, the bankruptcy trustee has exclusive authority to void fraudulent
transfers on behalf of the bankruptcy estate and its creditors, and that individual creditors are
barred from pursuing a fraudulent-transfer voidance action in bankruptcy court to the extent
that their claim is derivative. See Nat’l City Bank v. Coopers & Lybrand , 409 N.W.2d 862,
869-70 (Minn. App. 1987) (noting that if an unsecured creditor’s claim is derivative, it
belongs exclusively to the bankruptcy estate and may be pursued only by the bankruptcy
trustee or debtor), review denied (Minn. Oct. 21, 1987); see also 11 U.S.C. § 541(a)(1). We
also recognize that under the general rule if the challenged transfers were known d uring the
pendency of the bankruptcy proceedings, the bankruptcy trustee could have exercised its
exclusive authority to pursue a transfer voidance action in bankruptcy court to the extent
allowed under sections 544(b)(1) or 548(a)(1) . It is undisputed that the bankruptcy trustee
did not do so.
Instead, after the bankruptcy action was closed the Forsters filed a fraudulent-transfer
voidance claim in state district court. Thereafter, the bankruptcy trustee has taken no action
to reopen the bankruptcy action or to assert the bankruptcy court’s subject-matter jurisdiction
over the cause of action. Accordingly, we need not determine whether the Forsters’ MUFTA

10
claim is the type of claim that would belong exclusively to the bankruptcy court, because here
there is no bankruptcy action pending. Given the bankruptcy trustee’s inaction, we conclude
that the general rule under the federal bankruptcy code does not preclude the Forsters from
pursuing their claim in district court to the extent allowed under state law.
b. The bankruptcy trustee’s authority to pursue fraudulent-transfer voidance
actions on behalf of the estate expired under 11 U.S.C. § 546(a)(2) (2014)
when the bankruptcy action was closed , and the trustee has not acted to
reopen the action.

The Forsters argue that because David Theis’s bankruptcy action is closed , the time
period for the bankruptcy trustee to pursue a transfer voidance action in bankruptcy court has
passed pursuant to 11 U.S.C. § 546(a) (2). In turn, Michael Dougherty and D&A maintain
that because the bankruptcy trustee could act to reopen the bankruptcy action in order to
abandon the fraudulent-transfer voidance action, and because the doctrine of equitable tolling
preserves the cause of action on behalf of the bankruptcy estate, the district court lack s
subject-matter jurisdiction.
As a preliminary matter, we note that the parties did not raise the time limitations under
11 U.S.C. § 546(a) (2014) or the doctrine of equitable tolling at the district court but did raise
the issue of abandonment. The district court did not address section 546(a), equitable tolling,
or abandonment in determining that it had subject -matter jurisdiction to hear, and that the
Forsters had standing to bring, a transfer voidance action under MUFTA. “A reviewing court
must generally consider only those issues that the record shows were presented and considered
by the [district] court in deciding the matter before it.” Thiele v. Stich, 425 N.W.2d 580, 582
(Minn. 1988) (quotation omitted).

11
Nonetheless, the rule that issues raised for the first time on appeal will not be addressed
is not “ironclad.” Putz v. Putz, 645 N.W.2d 343, 350 (Minn. 2002); see Minn. R. Civ. App.
P. 103.04 (noting that appellate courts may address issues as justice requires and may review
rulings affecting the ruling from which an appeal is taken). A “well-established” exception
to the rule allows an appellate court to consider an issue that is plainly decisive of the entire
controversy, where the lack of a district court rulin g causes no possible advantage or
disadvantage to either party. Watson v. United Servs. Auto. Ass’n , 566 N.W.2d 683, 687-88
(Minn. 1997) (deciding new issue on appeal where it was a novel issue of first impression, a
statute-based theory, and relied on undisputed facts).
Section 546(a)(2) of the federal bankruptcy code provides that a trustee of a bankruptcy
estate cannot commence an action or proce eding under sections 544 (2014) or 548 (2014)
after the bankruptcy case is closed or dismissed. Here, it is undisputed that David Theis’s
bankruptcy action was closed on April 21, 2015, before the Forsters filed their claim in district
court on October 2, 2015. Section 546(a)(2) establishes the time limit here because April 21,
2015, occurred later than the dates of the time limits imposed under 11 U.S.C. § 546(a)(1)(A),
(B) (2014) . Further, the date that the bankruptcy action was closed is dispositive , as it
determines whether the district court now has subject-matter jurisdiction to hear the Forsters’
claim under state law.
Michael Dougherty and D&A raised federal bankruptcy code section 546 and
arguments related to abandonment and equitable tolling in their written brief and at oral
argument. The Forsters did not directly cite to section 546(a) in their appellate brief, but they
did argue that the federal bankruptcy code imposes time limits on the bankruptcy trustee’s

12
ability to act . At oral argument they argued exclusively about the application of section
546(a). Given this record, we see no prejudice or disadvantage to either party in addressing
the effect of section 546(a)(2) on the bankruptcy trustee’s ability to act, or in considering the
parties’ related arguments, because it is dispositive of the jurisdictional question presented.9
On appeal, Michael Dougherty and D&A argue that because the bankruptcy trustee
could reopen the bankruptcy action under 11 U.S.C. § 350(b) (2014) in order to abandon the
fraudulent-transfer voidance course of action under 11 U.S.C. § 554(d) (2014), and because
the doctrine of equitable tolling preserves the bankruptcy trustee’s ability to pursue the cause
of action on behalf of the bankruptcy estate, the district court lacks subject-matter jurisdiction
to hear the Forsters’ claim under state law. Section 554(d) provides that an undisclosed asset
that is not otherwise administered in the bankruptcy action continues to be part of the estate,
even after the bankruptcy is closed. Further, “[t]he doctrine of equitable tolling is read into
every federal statute of limitation including § 546 . . .” of the federal bankruptcy code. In re
Pomaville, 190 B.R. 632, 636-37 (Bankr. D. Minn. 1995). However, both of these arguments
assume that the bankruptcy trustee has acted to reopen the bankruptcy case, which has not
occurred here. Therefore , these arguments are irrelevant to this appeal , and we need not
address them.

9 Following this same rationale, we do not consider the issue of concurrent jurisdiction raised
for the first time at oral argument by the Forsters, which was not presented to the district court,
was not adequately briefed on appeal, and which Michael Dougherty and D&A had no
opportunity to address. Issues not briefed on appeal are not properly before the appellate
court. Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982).

13
c. The district court did not err in determining that it h ad subject -matter
jurisdiction to hear, and the Forsters had standing to bring, a fraudulent-
transfer voidance claim under MUFTA.

With this background, we turn to the question of subject -matter jurisdiction presented
on appeal. “Subject-matter jurisdiction is defined as not only authority to hear and determine
a particular class of actions, but authority to hear and determine the particular questions the
court assumes to decide.” Irwin v. Goodno , 686 N.W.2d 878, 880 (Minn. App. 2004)
(quotation omitted). Whether subject -matter jurisdiction exists presents a question of law,
which we review de novo. Tischer v. Hous. & Redev. Auth. , 693 N.W.2d 426, 428 (Minn.
2005), aff’d, 693 N.W.2d 426 (Minn. Mar. 24, 2005). “Standing is the requirement that a
party has a sufficient stake in a justiciable controversy to seek relief from a court.” State by
Humphrey v. Philip Morris, Inc. , 551 N.W.2d 490, 493 (Minn. 1996) . Standing is a lso a
question of law that this court reviews de novo. Garcia-Mendoza v. 2003 Chevy Tahoe, 852
N.W.2d 659, 663 (Minn. 2014).
As a preliminary matter, the Forsters argue that Michael Dougherty and D&A
consented to the district court’s subject-matter jurisdiction in this case because they failed to
object to the district court’s jurisdiction earlier in the proceedings. However, a party “may
not consent to a court acting when it has no subject -matter jurisdiction.” Gummow v.
Gummow, 356 N.W.2d 426, 428 (Minn. App. 1984); see McCullough & Sons, Inc. v. City of
Vadnais Heights, 883 N.W.2d 580, 590 (Minn. 2016) (noting that unlike a defect in the court’s
subject-matter jurisdiction, parties can waive defects in personal jurisdiction). “[S]ubject-
matter jurisdiction, which concerns the court’s abilit y to consider a question, and standing,
which concerns a party’s right to bring a particular action . . . may be challenged at any time.”

14
Cochrane v. Tudor Oaks Condo . Project, 529 N.W.2d 429, 433 (Minn. App. 1995), review
denied (Minn. May 31, 1995).
“Federal district courts have exclusive jurisdiction over bankruptcy cases and
nonexclusive jurisdiction over all proceedings that arise under, or relate to, them.” Michener,
217 B.R. at 266; see 28 U.S.C. § 1334(a), (b) (2014). The federal district court may then refer
bankruptcy cases and proceedings to bankruptcy judges for a hearing and final determination
in bankruptcy court, subject to appeal. Michener, 217 B.R. at 266 -67. A state district court
is a court of general jurisdiction that has, with lim ited exceptions, the power to hear all civil
cases. Irwin, 686 N.W.2d at 880 (citing Minn. Const. art. VI, § 3). We recognize that the
federal bankruptcy code gives federal district courts exclusive subject-matter jurisdiction over
bankruptcy cases and p roceedings arising thereunder, but we reiterate that, here , there is no
bankruptcy action pending for the bankruptcy court to assert its jurisdiction over. The only
pending action is a fraudulent -transfer voidance claim under MUFTA in Wright County
district court, and the power of state district courts to hear civil cases includes such actions.
State courts in at least two jurisdictions have recognized th e principle that once the
statutory time period for the bankruptcy trustee to pursue an action on behalf of the bankruptcy
estate has expired under section 546 of the federal bankruptcy code, an unsecured creditor
may bring an action against a fraudulent transferee of a bankruptcy debtor under state law .
See Dixon v. Bennett , 531 A.2d 1318, 1324 ( Md. Ct. Spec. App. 1987) (finding that an
unsecured creditor can bring a state cause of action in state court once the time limit for the
trustee to bring an action in bankruptcy court has expired under 11 U.S.C. § 546), cert. denied,
536 A.2d 664 (Md. 1988), and overruled on other grounds by BAA, PLC v. Acacia Mut. Life

15
Ins. Co., 929 A.2d 1 ( Md. 2007); Casey Nat’l Bank v. Roan , 668 N.E.2d 608, 61 2-13 (Ill.
App. Ct. 1996) (finding that once a bankruptcy trustee’s sole authority to pursue fraudulently
conveyed assets expires under 11 U.S.C. § 546(a), and the trustee has no viable cause of
action, an unsecured creditor may pursue his or her own cause of action in state district court),
review denied (Ill. Dec. 4, 1996).
We are persuaded by the reasoning articulated by those state appellate courts . Here,
the bankruptcy action is closed, the time for the bankruptcy trustee to act has expired under
federal bankruptcy code section 546(a)(2), and the bankruptcy trustee has not acted to reopen
the bankruptcy action to either abandon the cause of action or to pursue it under the doctrine
of equitable tolling. As such, there is no pending bankruptcy action, and the bankruptcy court
has not asserted its subject -matter jurisdiction to hear a voidance action related to the
fraudulent transfers alleged. Thus, we conclude that the state district court has subject-matter
jurisdiction to hear, and that an unsecured creditor has standing to bring, a fraudulent-transfer
voidance claim in state district court to the extent that the claim is allowed under state law.
D E C I S I O N
Because David Theis’s bankruptcy action is closed and the bankruptcy trustee has not
acted to reopen the action in bankruptcy court, the district court has subject-matter jurisdiction
to hear the Forsters’ claim, and the Forsters, as unsecured creditors of David Theis, have
standing to bring their claim against Michael Dougherty and D&A, as third-party transferees
of David Theis, to the extent that the Forsters have a valid claim under state law.
Affirmed.