A growing list of federal and state courts have determined that fraudulent transfer claims brought by an equity receiver are not barred by the doctrine of in pari delicto. While the following list includes many of the significant and most frequently-cited decisions setting forth or upholding this proposition of law, it is by no means exhaustive.

Jones v. Wells Fargo Bank, N.A., 666 F.3d 955 (5th Cir. 2012) (holding that “[a]pplication of in pari delicto would undermine one of the primary purposes of the receivership established in this case [which is to pursue claims to recover funds for defrauded investors and other innocent victims], and would thus be inconsistent with the purposes of the doctrine.”)

Knauer v. Jonathon Roberts Fin. Group, Inc., 348 F.3d 230, 236 (7th Cir. 2003) (agreeing with its prior holding in Scholes that an exception to the in pari delicto doctrine exists for a receiver bringing claims to avoid fraudulent conveyances in a Ponzi scheme case, but finding that such exception may not apply to other types of claims a receiver may bring against third parties, such as negligence, fraud and conversion)

In re Hedged-Investments Assoc., Inc., 84 F.3d 1281 (10th Cir. 1996) (noting that under the law of receivership, unlike bankruptcy law, in pari delicto is not applicable to a receiver because the bad acts of the corporate entity and its principals should generally not be imputed to the receiver)

FDIC v. O’Melveny & Myers, 61 F.3d 17 (9th Cir. 1995) (determining on remand from the U.S. Supreme Court that, under California law, “in general, ‘[a] receiver occupies no better position than that which was occupied by the person or party for whom he acts . . . an any defense good against the original party is good against the receiver, . . . this rule is subject to exceptions; defenses based on a party’s unclean hands or inequitable conduct do not generally apply against that party’s receiver.”) (noting that the receiver was not a party to the original inequitable conduct and that application of the in pari delicto defense would place losses on innocent creditors rather than the allegedly culpable defendant) (“While a party may itself be denied a right or defense on account of its misdeeds, there is little reason to impose the same punishment on a trustee, receiver or similar innocent entity that steps into the party’s shoes pursuant to court order or operation of law.”) (reasoning that because “[a] receiver, like a bankruptcy trustee and unlike a normal successor in interest, does not voluntarily step into the shoes of the bank[,]” application of equitable defenses against the receiver would frustrate the intricate regulatory scheme designed to protect innocent third parties by imputing the bank’s inequitable conduct to the receiver.)

Scholes v. Lehmann, 56 F. 3d 750 (7th Cir. 1995) (declining to impute the wrongdoer’s bad acts to a subsequent independent receiver to bar the receiver’s recovery claims based on the in pari delicto doctrine, because a receiver is an involuntary successor appointed by a court of equity to protect the interests of defrauded investors, and while “the wrongdoer must not be allowed to profit from his wrong . . . [t]hat reason falls out now that [the wrongdoer] has been ousted from control of an beneficial interest in the corporations. The appointment of the receiver removed the wrong-doer from the scene. The corporations were no more [the wrongdoer’s] evil zombies. Freed from his spell, they became entitled to the return of the moneys – for the benefit not of [the wrongdoer] but of innocent investors . . . .”)

Mosier v. Stonefield Josephson, Inc., No. CV-11-266 (PSG), 2011 U.S. Dist. LEXIS 124058 at *16-17 (C.D. Cal. Oct. 25, 2011) (finding that, “[l]ike the receiver in O’Melveny & Meyers, the Receiver in this case was not a party to any of the alleged misconduct in which the [wrongdoers] engaged. Rather, he was appointed by the Court ‘to take such action as is necessary and appropriate to preserve and take control of and to prevent the dissipation, concealment, or disposition of any assets . . . .’ The Court finds persuasive the Receiver’s assertion that allowing [the wrongdoers’ auditor] to invoke the defense of in pari delicto would frustrate the Court’s plan by ‘diminishing the value of the asset pool held,’ thereby hurting innocent third-party creditors, while benefiting . . . an alleged wrongdoer.”)

Fine v. Sovereign Bank, 634 F. Supp. 2d 126, 143 (D. Mass. 2008) (“Massachusetts courts would allow a receiver to avoid the defense if the equities so required.”)

Javitch v. Transam Occidental Life Ins. Co., 408 F. Supp. 2d 531, 538 (N.D. Ohio 2006) (rejecting argument that receiver’s claim was precluded by in pari delicto doctrine)

Hays v. Paul, Hastings, Janofsky & Walker LLP, No. CIV.A.106CV754–CAP, 2006 WL 4448809, at *10 (N.D. Ga. Sept.14, 2006) (barring application of in pari delicto defense against receiver because “the result would be the protection [of] wrongdoers and the punishment of the innocent victims”).

ISP.com LLC v. Theising, 805 N.E.2d 767, 773 (Ind. 2004) (permitting “a receiver to assert claims free of defenses, such as in pari delicto”)

Freeman v. Dean Witter Reynolds, Inc., 865 So. 2d 543, 550 (Fla. Dist. Ct. App. 2003) (“[T]he receiver may also pursue certain claims that would be barred by the defense of in pari delicto if pursued by the corporation that was placed in receivership.”)

Albers v. Cont’l Ill. Bank & Trust Co., 17 N.E.2d 67, 69 (Ill. App. Ct. 1938) (discussing earlier holding that the defense of in pari delicto was “unavailing against receivers”)

Camerer v. California Sav. & Commercial Bank, 4 Cal.2d 159, 170-71, 48 P.2d 39 (1935) (“[I]t is held that although the insolvent debtor cannot set aside a transfer in fraud of his creditors, as he is in pari delicto, the receiver acting for the creditors may attack it.”)