Trustco Bank v. Mathews, et al., C.A. No. 8374-VCP, (Del. Ch. Jan. 22, 2015).
In a recent decision by Vice Chancellor Parsons of the Delaware Court of Chancery (the “Court”), the Court granted a motion for summary judgment barring a creditor from pursing a claim against a Delaware qualified trust under the theory of laches. Consistent with prior holdings of the Court, the Vice Chancellor concluded that the filing of a fraudulent transfer claim after the expiration of the relevant statute of limitations period is presumptively an unreasonable delay.
In analyzing the case, the Court looked to the “most significant relationship” test as set forth in the Restatement (Second) Conflicts of Laws to determine the relevant statute of limitations period. The Court reviewed the trust’s relationship with three separate state statutes including New York, Florida and Delaware. Based upon the facts presented, the Court found both Florida and Delaware to have significant relationships with the transfers in question. Both states have fraudulent transfer statutes with limitations periods of four years from the time of the transfer or one year from the date when discovery of the transfer occurred or reasonably should have occurred, whichever is longer. As such, the Court found it unnecessary make a final determination with regard to which of the two states ultimately held the most significant relationship. As the creditor’s fraudulent transfer claims were filed after the tolling of the relevant statutes, the Court time barred the claims and granted the Defendant’s motion for summary judgment against the Plaintiff.