Section 101(31) of the Bankruptcy Code defines an “insider” of a corporation as a director of the debtor; officer of the debtor; person in control of the debtor; partnership in which the debtor is a general partner; general partner of the debtor; or relative of a general partner, director, officer or person in control of the debtor. Courts regularly treat this definition as illustrative of the types of possible insider relationships, rather than an exhaustive list. Accordingly, determining who qualifies as an insider is not always a simple question and will frequently depend upon the facts of each case.
Recently, in In re Longview Aluminum, LLC , the 7th U.S. Circuit Court of Appeals affirmed the decisions of the lower courts that found a member of a limited liability corporation was an “insider” under 11 U.S.C. § 101(31) of the Bankruptcy Code in connection with a preference action brought by a bankruptcy trustee to recover all payments made to the member within one year of the commencement of the bankruptcy case.
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