IN re Gen Mort Co of America 2008 WL 850328 (Bankr.M.D.Fla.)

Avoidance - Assignee of note and mortgage was a mere conduit of avoided payments.

The assignee of a note and mortgage executed by the debtor's principals, which itself assigned the note and mortgage to another company and retained only a service fee, was not an "initial transferee" but, rather, was merely a "conduit," a Florida bankruptcy court has held. Thus, pursuant to 11 U.S.C.A. 550, the assignee was not liable to the bankruptcy trustee for the debtor's prepetition and postpetition transfers, which had been avoided under 548 and 549 of the Code. The assignee had no legal right to use the funds for its own purposes, the court reasoned.