Memorandum of Decision Re: Jurisdiction Over Foreign National

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In re ADAPTIVE VIDEO, INC,                                               No. 96-11142        Debtor. ___________________________/ RAYMOND A. CAREY, Trustee,        Plaintiff,    v.                                                                                        A.P. No. 96-1185 JOHNSON CHUA and EGAN CHUA,        Defendants. ______________________________/
Memorandum of Decision
     Defendant Johnson Chua was an officer and shareholder of the corporate debtor. Shortly before the bankruptcy was commenced, he wire transferred $130,000.00 in corporate funds to the Bahamas bank account of his father, defendant Egan Chua. In this adversary proceeding, the bankruptcy trustee seeks to avoid the transfer and recover the funds. Egan's motion to quash service is now before the court.      Egan presently resides in the Philippenes. He has never done business in the United States, although he has made annual visits to this country. He argues that he has insufficient contacts with this country to establish jurisdiction over him.      Jurisdiction over a foreign recipient of an avoidable transfer may be established if the transferee has had minimum contacts with this country and the exercise of jurisdiction over him is fair and reasonable. In re Schwinn Bicycle Co., 192 B.R. 461, 469 (Bkrtcy. N.D.Ill.1996). Both elements are present in this case.      There is no requirement that a defendant have done business in this country in order to be subject to suit to recover a transfer. While the transferee's contacts with this country must be more than random, fortuitous or attenuated, the act of accepting the transfer may itself constitute a sufficient contact. In re Schwinn Bicycle Co., supra, at 473. A fraudulent transfer is considered to have occurred in the country where the transfer originated. In re Chase & Sandborn Corp., 835 F.2d 1341, 1346 (11th Cir.1988), rev'd on other grounds sub nom Granfinanciera v. Nordberg, 106 L.Ed.2d 26 (1989).      Moreover, Chua admits that he made annual visits to this country to visit his relatives. The transfer in this case was effected by one of those relatives. The only reason Johnson Chua transferred the funds to Egan was their familial relationship. These annual visits therefore constitute additional contacts with this country sufficient to establish personal jurisdiction to recover intrafamily transfers.      As to the second test, there is nothing unfair about making Chua defend his right to retain the transfer in this country, where the transfer is deemed to have occurred. The trustee is not seeking any additional damages, or anything more than simple return of the funds. Egan can avoid the burden of litigation in this country merely by returning the transferred funds. If he is allowed to keep them, then a major goal of this country's bankruptcy system will have been thwarted.      The trustee admits that he has not yet effected service on Egan. Therefore, insofar as Egan's motion to quash is based on lack of service it will be granted. However, that part of the motion which seeks dismissal for lack of jurisdiction will be denied. The trustee shall submit an appropriate form of order.
Dated: September 30, 1996                                               _______________________                                                                                               Alan Jaroslovsky                                                                                               U.S. Bankruptcy