July 24, 2017A Constructive Trust by definition is: "an equitable remedy resembling a trust (implied trust) imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference."The leading 6th Circuit case, XL/Datacomp v Wilson (In re Omegas Group), 16 F3d 1443, 1449 (6th Cir., 1994), took a hard line opinion on constructive trusts determining that constructive trusts are the "anathema to the equities of bankruptcy," Id. Further, the 6th Cir. barred bankruptcy courts from imposing them "[u]nless a court has already impressed a constructive trust upon certain assets or a legislature has created a specific statutory right to have particular kinds of funds held as if in trust." Id.
