Matter of Liquidation of Medcare Hmo, Inc.

James Schacht, Acting Director of Insurance for the State of Illinois (the Director), 1 as liquidator of the estate of MedCare HMO, Inc. (Medcare), an Illinois-licensed health maintenance organization (HMO), brought this action to recover attorney fees paid to the law firm of Katten Muchin & Zavis (Katten Muchin). The Director argued that the fees were recoverable as a voidable preference under section 204 of the Illinois Insurance Code (215 ILCS 5/204 (West 1992)) (the Insurance Code) and as a fraudulent conveyance under the Uniform Fraudulent Transfer Act (740 ILCS 160/1 et seq. (West…