Golf Channel to Get a Mulligan?
In a surprise move, the Fifth Circuit vacated its recent, controversial Golf Channel opinion, potentially giving the Golf Channel a second chance in a case that seemed lost. As I discussed in my previous post, the Fifth Circuit recently held that the Golf Channel had to return over $5.9 million in payments it had received from Ponzi schemer Allen Stanford’s Stanford International Bank, pursuant to a fraudulent transfer action initiated by the bank’s receiver. The Golf Channel had asserted a “reasonably equivalent value” defense, saying that it had aired advertisements having value reasonably equivalent to the over $5.9 million in payments that the Golf Channel had received. However, the Fifth Circuit held that this defense does not apply in Ponzi scheme cases since advertisements promoting a Ponzi scheme do not benefit a Ponzi scheme’s creditors and may actually hurt them.
After this decision, the Golf Channel filed a petition for a panel rehearing, citing a lack of Texas case law on the issue. The Fifth Circuit granted the Golf Channel’s petition, vacated the original opinion, and certified a question to the Supreme Court of Texas regarding the proper interpretation of “value” and “reasonably equivalent value” in the context of a good faith transferee of a Ponzi scheme under the Texas Uniform Fraudulent Transfer Act. The Supreme Court of Texas has accepted the certified question and requested briefs on the merits of the parties, but a date for oral argument has not yet been set.
So, it appears that for the moment at least, all is not lost for the Golf Channel.