415. The trustee argued that due to the default judgment, he “need not prove that the transfer ... was a preference, but need only show that [the remaining defendant was] a transferee against whom recovery is appropriate under Section 550.” Id. Like the Trustee here, the trustee in that case “emphasized the separation of the concepts of avoidance and recovery” and a ) (“[T]he court concludes that [defendant] was not limited to raising only the defenses in 11 U.S.C. § 550 of a mediate transferee. Although this is the general rule, this rule is not strictly applied when the underlying transfer was avoided by virtue of a default judgment.”), rev’d in part on other grounds, appeal dismissed in part, 482 Fed.Appx. 454 (11th Cir.2012); In re AVI, Inc., 389 B.R. 721, 735 (9th Cir. BAP 2008) (<HOLDING>). In short, where the Trustee settled with
holding that a trustee is not required to avoid the initial transfer from the initial transferee before seeking to avoid it and recover from subsequent transferees and noting that this conclusion is consistent with case law that has disallowed automatic recovery from a subsequent transferee following the avoidance of an initial transfer through a stipulated judgment or default when the transferee had not been a party to the underlying avoidance proceeding holding a party to be an initial transferee because she was given legal title to the funds holding that a trustee may settle with an initial transferee and still pursue recovery against a subsequent transferee but notwithstanding the trustee will still be required to prove that the transfers  were fraudulent and improper in connection with its suit against the subsequent transferee because the trustees settlement with the initial transferee did not involve any determination on the merits as to the initial transfers and in this way the subsequent transferee will be afforded its due process rights to contest the avoidability of these initial transfers holding that agent of corporation who used corporate funds to secure personal loan was initial transferee holding that a transferee is an initial transferee under the bankruptcy code if they exercise legal control over the assets received