A constructive trust is a creature of equity. However, the equities of bankruptcy are not the equities of the common law. Particularly in the case of Ponzi schemes, constructive trust claims in bankruptcy are disfavored.

The bankruptcy court lacks jurisdiction to permanently enjoin non-derivative third party claims agianst a party settling with the debtor.

A director and officer of a debtor was a party to an employment agreement, with severance benefits, executed longer than two years before the petition date. The director/officer was dismissed by the board within two years of the petition date. In connection with the dismissal, the director/officer entered into a settlement agreement resolving all claims against the debtor (including claims arising under the employment agreement). Payments of approximately $6 million were made within two years of the petition date.

Because the settlement agreement was executed within two years of the petiiton date, transfers made pursuant thereto were within the two-year look-back period of 11 USC 548. The "insider status" of the transferee (i.e., the former officer/director) is determined at the time of the settlement agreement, rather than at the time of the transfer (when the transferee was no longer a statutroy insider).