Opinion ID: 4564821
Heading Depth: 1
Heading Rank: 8

Heading: Personal Liability of Kanios.

Text: Kanios argues that she is not personally liable to the Trustee for any fraudulent transfers because PCI paid all interest to her 401(k) plan and therefore she was not the “transferee” or “the entity for whose benefit such transfer was made.” 11 U.S.C. § 550(a). As she was not the beneficiary of the transfer, the transfer was not quantifiable and was not accessible to her. See Bonded Fin. Servs., Inc. v. Eur. Am. Bank, 838 F.2d 890, 893-96 (7th Cir. 1988). The district court properly rejected this argument, which Kanios did not raise until the summary judgment motion proceedings. On appeal, Kanios further argues for the first time that the Trustee could recover from her only through a claim against the plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), and the Trustee lacks standing under ERISA. A. In rejecting this contention, the district court recognized that it is plainly contradicted by the facts. As the sole beneficiary of the plan, Kanios received PCI interest payments the instant the plan received them. The payments were quantified in the lawsuit. The proceeds were fully accessible to Kanios at any time, albeit -25- subject to a ten percent tax penalty if withdrawn before she reached early retirement age. See 26 U.S.C. § 72(t)(1), (2)(A)(i). That a prudent 401(k) plan beneficiary would not incur an early withdrawal penalty did not make the money inaccessible at the time of the fraudulent transfer. See Haury v. Comm’r, 751 F.3d 867, 868-69 (8th Cir. 2014). That the plan may invest the proceeds before withdrawal did not mean the initial deposit was not quantifiable. The interest payments increased the funds available for investing in her plan account by $572,500.22. Therefore, Kanios was the transferee of those payments from whom the creditor may recover under MUFTA. See Minn. Stat. § 513.48(b)(1)(i). B. We normally would not consider Kanios’s ERISA argument because it is raised for the first time on appeal. In any event, it is without merit. Whether the Trustee has standing to bring an action under ERISA’s remedial provisions because the Trustee is not a plan participant, beneficiary, fiduciary, or the Secretary of Labor is irrelevant. See 29 U.S.C. § 1132(a). The Trustee does not need standing to sue the 401(k) plan because the Trustee is not seeking a remedy under ERISA’s “comprehensive civil enforcement scheme.” Aetna Health, Inc. v. Davila, 542 U.S. 200, 208 (2004) (quotation omitted). The Trustee seeks to claw back assets received by the plan, asserting a claim under the federal Bankruptcy Code. Kanios cites no case in which ERISA remedies preempted a federal cause of action. See In re Target Corp. Sec. Litig., 275 F. Supp. 3d 1063, 1067 (D. Minn. 2017) (considering claims brought by plaintiffs under both ERISA and federal securities law).