United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 17-1097
                        ___________________________

                           John R. Stoebner, Trustee

                            lllllllllllllllllllllAppellant

                                         v.

                        Opportunity Finance, LLC, et al.

                            lllllllllllllllllllllAppellees

                           ------------------------------

                            JPMorgan Chase Bank

                lllllllllllllllllllllAmicus on Behalf of Appellees
                                     ____________

                  Appeal from United States District Court
                 for the District of Minnesota - Minneapolis
                                ____________

                           Submitted: June 14, 2018
                           Filed: November 20, 2018
                                 ____________

Before LOKEN, GRUENDER, and ERICKSON, Circuit Judges.
                          ____________

LOKEN, Circuit Judge.
       For many years prior to September 2008, Minnesota businessman Thomas
Petters, through his company Petters Company, Inc. (“PCI”), “purported to run a
‘diverting’ business that purchased electronics in bulk and resold them at high profits
to major retailers.” Ritchie Capital Mgmt., LLC v. Stoebner, 

, 859 (8th
Cir. 2015). Investors, deceived by fabricated purchase orders, provided PCI
financing to acquire merchandise for resale. Ritchie Special Credit Invs., Ltd. v. U.S.
Tr., 

, 850 (8th Cir. 2010). In fact, PCI did not purchase merchandise
and sell it to retailers. Its “income” came from investor loans that PCI used to repay
earlier investors. Thus, PCI was a multi-billion dollar “Ponzi scheme.”1 Petters also
acquired legitimate businesses. His investment company, Petters Group Worldwide,
LLC, purchased the stock of Polaroid Corporation in April 2005. Ritchie Capital
Mgmt., LLC v. JPMorgan Chase & Co., No. 14-CV-4786 (DWF/FLN), 

, at *2 (D. Minn. Dec. 14, 2017). Prior to the acquisition, a separate Petters
company, Petters Consumer Brands, LLC (“PettersCB”), paid Polaroid licensing fees
for the sale of “Polaroid” branded consumer electronics to prominent retailers.

       Following the collapse of Petters’s ponzi scheme, Polaroid Corporation and
related entities (collectively, “Debtors”) filed for protection under Chapter 11 of the
Bankruptcy Code. The cases were converted to Chapter 7 liquidation proceedings in
2009; John Stoebner was appointed bankruptcy Trustee. Representing Debtors’
creditors, he brought this adversarial suit against Opportunity Finance, LLC and
related defendants (“Opportunity Finance”) and DZ Bank AG Deutsche Zentral-
Genossenschaftsbank (“DZ Bank”), seeking to avoid as fraudulent transfers under the
Minnesota Uniform Fraudulent Transfer Act (“MUFTA”) over $250 million in loan


      1
       In broad terms, a Ponzi scheme is a “fraudulent business venture[] in which
investors’ ‘returns’ are generated by capital from new investors rather than the
success of the underlying business venture.” In re Armstrong, 

, 520 n.3
(8th Cir. 2002). After the scheme was exposed in 2008, Petters was convicted of
fraud and money laundering and sentenced to 50 years imprisonment. See United
States v. Petters, 

(8th Cir. 2011), cert. denied, 

(2012).

                                         -2-
payments made to defendants by PettersCB in 2003-2005, prior to Petters’s
acquisition of Polaroid. See 11 U.S.C. § 544(b)(1); Minn. Stat. § 513.44 (2014).2
The Second Amended Complaint (“SAC”) alleged that two Debtors, Polaroid
Holding Company (“PHC”) and Polaroid Consumer Electronics, LLC (“PCE”), “are
the successors in interest to [PettersCB].” The bankruptcy court3 granted defendants’
motions to dismiss, and the district court4 affirmed. Debtors appeal. We affirm.

                             I. The Issues on Appeal.

      The Trustee filed the SAC on November 8, 2013. On December 20, defendants
moved to dismiss. See Fed. R. Civ. P. 12(b)(6), as incorporated by Fed. R. Bankr. P.
7012(b). After lengthy argument on March 3, 2014, the bankruptcy court took the
motions under advisement. On February 18, 2015, the Supreme Court of Minnesota
issued its decision in Finn v. Alliance Bank, holding that the so-called “Ponzi-scheme
presumption” previously adopted by some courts cannot be used to establish three
elements of a claim under MUFTA -- fraudulent intent, the debtor’s insolvency at the
time of the transfer, and the lack of reasonably equivalent value. 

,
645-53 (Minn. 2015). At a December 2015 omnibus hearing in the Chapter 7
proceedings, the Trustee for the first time sought leave to file a third amended
complaint to address seven different issues. The bankruptcy court advised that a



      2
       Minnesota amended MUFTA in 2015 to enact amendments to the Uniform
Voidable Transfers Act. See 2015 Minn. Sess. Law Serv., ch. 17, sec. 4. The
amendments do not meaningfully modify the provisions of § 513.44 here at issue. In
any event, the prior provisions govern this suit. 

13.
      3
      The Honorable Gregory F. Kishel, Chief Judge of the United States
Bankruptcy Court for the District of Minnesota, now retired.
      4
       The Honorable Susan Richard Nelson, United States District Judge for the
District of Minnesota.

                                         -3-
written decision on the motions to dismiss was imminent and ruled it would not
entertain a motion to amend prior to issuing that decision.

        In January 2016, the bankruptcy court issued its lengthy decision granting the
motions to dismiss on two alternative grounds. In re: Polaroid Corp., 

(Bankr. D. Minn. 2016). First, the court held that the Trustee lacked statutory
standing to assert claims under MUFTA because he failed to identify any creditor of
PHC or PCE, the Debtors alleged to be successors-in-interest to PettersCB, that
would have an allowable claim against the Debtors to which it could look for
satisfaction to a transfer made by PettersCB before Petters acquired Polaroid. 

see generally In re Marlar, 

, 753 (8th Cir. 2001). Second, on the
merits, applying the Supreme Court of Minnesota’s decision in Finn, the court held
that the SAC failed to state a claim for actual or constructive fraudulent transfer under

. The court further ruled that allowing the Trustee to
file a third amended complaint would be futile, as the pleading of facts that might
demonstrate standing or state a claim would conflict with facts already pleaded. 

914. On appeal, the district court upheld the bankruptcy court’s decision to
dismiss on both grounds and further ruled that the bankruptcy court did not abuse its
discretion in denying leave to amend because the Trustee unreasonably delayed in
requesting leave to amend, defendants would be prejudiced, and any amendment
would be futile. Stoebner v. Opp. Fin., LLC, 

(D. Minn. 2016).

      The Trustee appeals all three rulings, asserting he has statutory standing, the
SAC stated claims for actual and constructive fraudulent transfer under MUFTA, and
the bankruptcy court erred in not permitting him to amend the SAC. Defendants
contest all three assertions; JPMorgan Chase Bank, N.A. (“JPMorgan”), filed an
amicus brief in support of the defendants.

       This is an unusual fraudulent transfer case because the Trustee seeks to avoid
transfers made by a party prior to the time it even arguably became a Chapter 7

                                          -4-
debtor. The standing issues are fully briefed, complex, and difficult.5 Our conclusion
that the bankruptcy court and the district court correctly dismissed the Trustee’s
claims on the merits makes it unnecessary to decide the standing issues.

              II. The SAC Failed To State a Claim Under MUFTA.

       A bankruptcy trustee may “avoid any transfer of an interest of the debtor in
property or any obligation incurred by the debtor that is voidable under applicable
law by a creditor holding an unsecured claim.” 11 U.S.C. § 544(b)(1). MUFTA
“allows creditors to recover assets that debtors have fraudulently transferred to third
parties.” 

. MUFTA includes both actual and constructive
fraud provisions:

        (a) A transfer made or obligation incurred by a debtor is fraudulent as
      to a creditor, whether the creditor’s claim arose before or after the
      transfer was made or the obligation was incurred, if the debtor made the
      transfer or incurred the obligation:

        (1) with actual intent to hinder, delay, or defraud any creditor of the
      debtor; or

        (2) without receiving a reasonably equivalent value in exchange for
      the transfer or obligation, and the debtor:

        (I) was engaged or was about to engage in a business or a transaction
      for which the remaining assets of the debtor were unreasonably small in
      relation to the business or transaction; or


      5
         As the bankruptcy court succinctly summarized its lengthy analysis: “The
flaw . . . in the Trustee’s pleaded notion of his own standing. . . . is best-expressed by
a question: in December, 2008, how could a creditor of [Debtors PHC] or PCE have
justified reaching back beyond the line of April, 2005, to sue a transferee of
PettersCB? The absurdity of such a notion is clear. . . 

.

                                           -5-
        (ii) intended to incur, or believed or reasonably should have believed
      that the debtor would incur, debts beyond the debtor’s ability to pay as
      they became due.

Minn. Stat. § 513.44(a)(1)-(2) (2014). Section 513.44(b) sets forth a non-exclusive
list of factors courts may consider in determining actual intent, commonly referred
to as “badges of fraud.” Citizens State Bank Norwood Young Am. v. Brown, 

, 60 (Minn. 2014).

       When the Trustee filed this adversary suit in December 2010, some courts
applying other fraudulent transfer statutes had adopted a “Ponzi scheme presumption”
that “allows a creditor to bypass the proof requirements of a fraudulent-transfer claim
by showing that the debtor operated a Ponzi scheme and transferred assets ‘in
furtherance of the scheme.’” 

(citation omitted); see Ritchie
Capital 

(declining to decide whether to adopt the presumption
under 11 U.S.C. § 548(a)(1), the Bankruptcy Code’s fraudulent transfer provision).

       The Trustee pleaded his MUFTA claims in reliance on the Ponzi presumption.
The SAC alleged that from 2003 to 2005, the period when the alleged fraudulent
transfers were made, PettersCB “was in the business of buying consumer electronics
to which [it] would affix the ‘Polaroid’ brand name and sell to retailers like Best
Buy.” “[U]nlike many of Tom Petters’ companies, [PettersCB] actually purchased,
warehoused, and sold to prominent retailers high volumes of consumer electronic
equipment,” funding a substantial portion of the purchases with loans from
Opportunity Finance bearing a 12% interest rate that was “substantially in excess of
the market rate for such loans.” The SAC sought to avoid over $251,000,000 of loan
repayments made by PettersCB before it acquired Polaroid and the related Debtors.




                                         -6-
       The SAC linked PettersCB’s financing of legitimate purchases of consumer
electronics to the on-going Ponzi scheme being perpetrated through PCI by alleging
that Petters caused PettersCB to finance and engage in these retail transactions “at
least in part to give his organization a physical presence in the marketplace and
thereby to give a false appearance of legitimacy to himself and his organization.”
Moreover, the SAC alleged, Petters laundered proceeds from the Ponzi scheme
through PettersCB and withdrew laundered funds from PettersCB. Regarding its
claims of constructive fraud, the SAC alleged that PettersCB “consistently lost money
and ran at a net loss.” Due to shrinking profit margins in the electronics industry,
licensing fees paid for the Polaroid brand, manufacturing problems, and various
expenses, PettersCB “could not realistically expect to make a profit.” Petters “knew
that [PettersCB] was destined to fail, and [PettersCB] ultimately and inexorably did
fail.” PettersCB was “insolvent on and after the dates of the Transfers” because its
debts were greater than the fair value of its property. It “was capitalized and propped
up with funds obtained by fraud through the Ponzi scheme,” and it received less than
reasonably equivalent value for loan repayments because the 12% interest rate was
“significantly above-market” or constituted “false profits.”

       In Finn, a debtor in the business of making loans to borrowers and then selling
participation interests to financial institutions fraudulently sold interests that
exceeded the amount of the loans or did not rest on any underlying loans, paying
early investors with funds provided by later 

. The
receiver sued under MUFTA to avoid those payments, invoking the “Ponzi-scheme
presumption.” Noting “that the focus of the statute is on individual transfers, rather
than a pattern of transactions that are part of a greater ‘scheme,’” the Supreme Court
of Minnesota held that the presumption does not apply to actual or constructive
fraudulent transfer claims under 

. Instead, a creditor
must “prove the elements of a fraudulent transfer with respect to each transfer, rather
than relying on a presumption related to the form or structure of the entity making the
transfer.” 

The Court concluded that Ponzi scheme payments to satisfy

                                         -7-
legitimate antecedent debts to defendant banks could not be avoided by the receiver
absent transaction-specific proof of actual intent to defraud or the statutory elements
of constructive fraud -- transfer by an insolvent debtor who did not receive reasonably
equivalent value in exchange. 

       Applying Finn, the bankruptcy court concluded that the SAC failed to state a
claim of actual or constructive 

. “The Trustee never alleges
that any of the money PettersCB borrowed from [Opportunity Finance] was diverted
away from real transactions in Polaroid-licensed merchandise, in fraud of
[Opportunity Finance] or any other person or entity.” 

The Trustee “slaps
[the term false profits] onto the return on investment from financing genuine deals,
on the sole pleaded ground that the rate on the lending was somehow excessive,
predatory.” 

single pleaded fact goes to how PettersCB would have paid
[Opportunity Finance] with a contemporaneous intent to . . . defraud its own
creditors.” 

“As binding precedent, Finn . . . reject[ed] MUFTA’s
application to . . . . [the] very fact-pattern . . . that appears on the face of the Trustee’s
pleading against the Opportunity Finance defendants.” 

        After thorough review, the district court agreed with the bankruptcy court’s

. “[T]he Trustee buttresses his pleading of fraudulent
intent with allegations that still invoke the Ponzi scheme presumption and otherwise
contradict Finn.” 

“The Trustee’s allegations concerning the insolvency
of PettersCB at the time of the transfers rely on the existence of the Ponzi scheme.”

“Such allegations are conclusory and merely track the statutory language,”
unlike allegations in Finn which the Minnesota Supreme Court found sufficient to
state a claim of constructive fraud. 

      On appeal, the Trustee argues that he adequately pleaded claims of actual and
constructive fraud under MUFTA. We review the bankruptcy court’s grant of the
motions to dismiss de novo. In re Archdiocese of Saint Paul & Minneapolis, 888 F.3d

                                             -8-
944, 950 (8th Cir. 2018). Under Federal Rule of Civil Procedure 8(a)(2), a complaint
“must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face’” to survive a motion to dismiss. Ashcroft v. Iqbal, 

, 678 (2009). “Threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice,” and the court is “not bound to accept
as true a legal conclusion couched as a factual allegation.” Id.6

       The Trustee argues the SAC stated a claim of actual fraud by alleging that any
transfer by PettersCB was made with intent to defraud because Petters knew the
company “was insolvent and embarked on a business plan certain to fail” and that
“ultimately and inexorably did fail,” and the challenged transfers “postponed
discovery of the facts that [PettersCB] was insolvent, propped up with Ponzi funds
and assumption of debt by related parties.” This theory flies in the face of Finn’s
requirement that each transaction must be analyzed individually and presumes
fraudulent intent based on “the form or structure of the entity making the 

. We agree with defendants and JPMorgan that this theory is
simply a repackaging of the Ponzi scheme presumption rejected by Finn. As the
Trustee properly notes, Finn held that “a court could make a rational inference from
the existence of a Ponzi scheme that a particular transfer was made with fraudulent
intent.” 

(quotation omitted). But the SAC is bereft of facts demonstrating
PettersCB’s intent to defraud its own creditors through the loan repayments. The
SAC affirmatively alleges that PettersCB financed legitimate business transactions
with capital from Opportunity Finance, repaying the loans through the proceeds of
“real life” transactions. There is no allegation that the proceeds of Opportunity
Finance loans were diverted to the Ponzi scheme being perpetrated through PCI.

      6
       We agree with defendants that the heightened particularity requirements of
Fed. R. Civ. P. 9(b) apply to fraudulent transfer claims under MUFTA. See
Residential Funding Co. v. Bell State Bank & Trust, 637 F. App’x 970, 971 (8th Cir.
2016); Kranz v. Koenig, 

, 455-56 (D. Minn. 2007); Fed. R. Bankr. P.
7009 (applying Rule 9(b) in adversary proceedings).

                                           -9-
       The Trustee contends the SAC stated a claim for constructive fraudulent
transfer because it adequately alleged that PettersCB was insolvent at the time of each
transfer, and the allegation that the 12% interest rate was “substantially in excess of
the market rate” sufficiently alleged that PettersCB did not receive “reasonably
equivalent value” for the transfers. We agree with the bankruptcy court that an
unsupported allegation that 12% interest was above “the market rate” does not
plausibly assert with sufficient particularity the absence of reasonably equivalent
value for the repayment of on-going loans to finance legitimate transactions in a
specific market -- the purchase and resale of consumer electronics by a “diverter.”7

        We also agree with the district court that the Trustee did not demonstrate that
PettersCB was or was about to be engaged in activities satisfying the financial
distress requirements of Minn. Stat. § 513.44(a)(2). The SAC alleges that PettersCB
“was about to engage in, a business for which its remaining assets were unreasonably
small” and “intended to incur, or believed or reasonably should have believed that it
would incur, debts beyond its ability to pay as they became due.” But the conclusory
assertion of MUFTA’s statutory elements are insufficient to state a claim. 

. And the additional supporting facts alleged -- that Petters CB “had no
legitimate capitalization,” was “propped up with funds obtained by fraud through the
Ponzi scheme,” and “operated at a net loss” -- are insufficient to plausibly plead that,
at the time of each of the hundreds of challenged transfers, PettersCB had insufficient
assets to carry on its legitimate business and would be unable to pay its debts as they


      7
       The SAC also sought to avoid a $349,000 prepayment penalty PettersCB paid
Opportunity Finance, alleging that PettersCB obtained no value for this transfer
because the notes “expressly provided for prepayment without penalty.” The Trustee
appealed the dismissal of this claim to the district court. The Trustee’s briefs to this
court argued that this claim sufficiently alleged lack of reasonably equivalent value
but did not otherwise appeal dismissal of this claim. Even if the SAC adequately
alleged lack of reasonably equivalent value, we agree with the district court that the
Trustee did not state a claim of actual or constructive fraud as to this transfer.

                                         -10-
came due. The SAC simply relies on the assumption that PettersCB was financially
distressed because it received infusions of money from Petters’s Ponzi scheme. That
is contrary to Finn: “it is not at all clear that every fraudulent investment arrangement
that is later determined to be a Ponzi scheme necessarily will have been insolvent
from its inception”; “a debtor could have assets or legitimate business operations
aside from the Ponzi scheme . . . that it uses to stave off insolvency, at least for a

.

       We agree with the bankruptcy court and the district court that the SAC failed
to state a claim of actual or constructive fraudulent transfers under MUFTA.

                          III. Denial of Leave To Amend.

      At the December 2015 omnibus hearing, counsel for the Trustee advised:

      Trustee Stoebner intends to seek to amend his complaint either by way
      of stipulation or motion to amend. There are seven purposes for this
      amendment.

            One is to address issues . . . regarding the Minnesota Supreme
      Court decision in the Finn case. A second purpose . . . concern[s] the
      amount of detail in the allegations concerning the issue of initial versus
      subsequent transferee [DZ Bank].

             A third purpose . . . is to allege with greater specificity . . . the
      trustee’s standing to bring state law claims based on transfers by . . .
      Petters[CB] which is not one of the named debtors . . . .

            A fourth purpose is to correct allegations that identify various
      golden [predicate] creditors.

            A fifth purpose is to try to set forth the trustee’s claims with
      greater clarity.


                                          -11-
             A sixth purpose is to allege a claim for unjust enrichment.

             And finally, a seventh purpose might be to eliminate one of the
      legal theories.

After extensive argument, the bankruptcy court ruled: “under . . . Rule 16, I am going
to issue an order that’s going to deny the trustee a right to file a motion for leave to
amend at any point before I have issued my decision on the pending motions for
dismissal and any potential of amendment is going to be entirely contingent on what
I do with that dismissal.” Six weeks later, the court granted the motions to dismiss
and ruled that granting the Trustee leave to file a Third Amended Complaint would
be futile.

       After the bankruptcy court ruled, the Trustee did not file a post-judgment
motion seeking leave to amend and attaching a proposed Third Amended Complaint.
Rather, the Trustee appealed to the district court, arguing the bankruptcy court erred
by invoking Rule 16, rather than Rule 15(a)(2), because “[u]nder settled law, a court
must address a motion to amend a complaint before ruling on a pending motion to
dismiss,” supporting that assertion with a mis-citation to our decision in Pure
Country, Inc. v. Sigma Chi Fraternity, 

, 956 (8th Cir. 2002). Without
attaching a proposed Third Amended Complaint, the Trustee set forth allegations that
an amended complaint “would have alleged” relating to his standing to challenge
transfers by PettersCB before Petters acquired Polaroid Corporation, and identifying
“predicate creditors” who would have that standing. The district court observed that
“it appears that Rule 15 is the applicable rule,” though “arguably, Rule 16 provides
some support for the Bankruptcy Court’s 

& n.9.
However, the court concluded, there was no abuse of the bankruptcy court’s Rule 15
discretion to deny leave to amend because the amendments would have been futile.

see United States ex rel. Raynor v. Nat’l Rural Utils. Coop. Fin.,



                                         -12-
Corp., 

, 958 (8th Cir. 2012) (“futility constitutes a valid reason for denial
of a motion to amend”).

        On appeal, the Trustee does not revisit the Rule 16 issue, and rightly so. The
Trustee neither filed a motion for leave to amend, as Rule 7(b)(1) requires, nor a
proposed Third Amended Complaint, as District of Minnesota Local Rule 15.1
requires. The Trustee’s oral request for leave to amend at a pretrial hearing raised
obvious case management issues committed to the court’s discretion by Rule
16(c)(2)(B), (K), (L), and (P). The effect of the bankruptcy court’s ruling was not to
bar a Third Amended Complaint, but to require that the Trustee file a motion for leave
to file that complaint after the court ruled on the pending motions to dismiss. At that
time, if the motions were granted, “district courts in this circuit have considerable
discretion to deny a post-judgment motion for leave to amend because such motions
are disfavored, but may not ignore the Rule 15(a)(2) considerations that favor
affording parties an opportunity to test their claims on the merits.” United States ex
rel. Roop v. Hypoguard USA, Inc., 

, 824 (8th Cir. 2009). Given the
Trustee’s nearly two-year delay in seeking leave to file a third amended complaint,
there was no abuse of the bankruptcy court’s case management discretion.

       On appeal, the Trustee instead argues that the district court erred in concluding
that the specific proposed amendments presented in his brief on appeal were futile.
This contention requires little discussion. As the trustee admits, these amendments,
belatedly presented to the district court, related to whether he has statutory standing
to sue. Therefore, our conclusion that the SAC fails to state a claim under MUFTA
for either actual or constructive fraud, regardless of the trustee’s standing, confirms
that the proposed amendments would be futile. The district court did not err in
affirming the bankruptcy court’s denial of leave to amend the SAC.

      The judgment of the district court is affirmed.
                     ______________________________

                                          -13-