Full opinion text
REBECCA R. PALLMEYER, United States District Judge The short-term cash management firm Sentinel Management Group, Inc. collapsed and filed for bankruptcy in August 2007 at the outset of the financial crisis. Required by federal law to segregate its clients' funds and invest in only the highest grade government securities, Sentinel instead pledged the securities in its clients' accounts as collateral for loans from the Bank of New York-which Sentinel then used to buy even more securities on its own "House" account for the benefit of corporate insiders. As credit markets tightened in the summer of 2007, Sentinel found itself unable to both repay the Bank's loan and return its clients' money on demand. All told, Sentinel cost its investors more than $600 million. See United States v. Bloom , 846 F.3d 243, 245-46 (7th Cir. 2017) (affirming Sentinel CEO Eric Bloom's convictions on nineteen counts of wire fraud and investment advisor fraud). Dozens of lawsuits were filed in the wake of Sentinel's failure. Many are ongoing to this day. Defendant UBS Securities, LLC is a former customer of Sentinel. In March 2007, Sentinel transferred $108 million to UBS, which included $14.4 million characterized as "cumulative interest." (UBS Securities, LLC's Memorandum in Support of its Motion for Summary Judgment [97] ("UBS's Opening Br."), 1.) The Plaintiff in this case, Frederick J. Grede, is the Liquidation Trustee for the Sentinel Liquidation Trust. The Trustee claims that Sentinel acted with actual "intent to hinder, delay, and defraud" its other creditors when making the pre-petition transfer to UBS, and argues that the cumulative interest payment represents "false profits." (Complaint [1] in No. 09-BR-521, 18-19) (citing 11 U.S.C. § 548(a)(1)(A) ). Accordingly, the Trustee seeks to avoid the transfer and return the $14.4 million to the Liquidation Trust. UBS has moved for summary judgment, arguing that the Trustee has alleged only a "general scheme to defraud," and not fraudulent intent with respect to the specific transfer at issue. (UBS's Opening Br. 2.) UBS asserts that the cumulative interest was "neither 'false' nor 'profits,' " but rather the proceeds of Sentinel's legitimate investment activity-which Sentinel properly paid to UBS in fulfillment of its legal and contractual obligations. (Id. ) For the reasons stated below, the Defendant's motion for summary judgment [96] is granted. FACTUAL BACKGROUND 1. Overview of Sentinel's Business and Bankruptcy Sentinel Management Group, Inc. was an Illinois corporation that provided cash-management services for institutional investors, hedge funds, and individuals. (UBS Securities LLC's Local Rule 56.1 Statement of Uncontested Material Facts [98] ("UBS SoF"), ¶ 3.) Its primary business consisted of making safe, short-term investments of the excess cash held by other investment firms called futures commission merchants ("FCMs")-brokers that execute trades in the futures and options markets and that are regulated by the Commodity Futures Trading Commission ("CFTC"). (Id. ) Although Sentinel did not itself execute futures or options trades, it too was registered as an FCM with the CFTC as a prerequisite for managing the funds of typical FCMs. (Id. ); see also Bloom , 846 F.3d at 246 (describing Sentinel's business model as "unique" and operating "like a mutual fund, pa[ying] a return based on profits and losses.") Importantly, this meant that Sentinel was governed by the same securities law and regulations as its clients. (UBS's SoF ¶ 4.) These regulations required Sentinel to maintain its clients' funds in segregated accounts, and limited Sentinel's use of those funds to "investments [in] certain high-quality government and corporate securities" such as U.S. Treasury bills. (Id. at ¶¶ 9-10) (citing 7 U.S.C. § 6d(b) and 17 C.F.R. § 1.25 ). Sentinel offered a variety of investment programs to account for different investment objectives and to comply with various regulations, but ultimately pooled all of its clients' assets into one of three distinct groups. (UBS's SoF ¶ 10) Sentinel called these groups SEG 1, SEG 2, and SEG 3. (Id. ) When advertising its investment options to potential customers, Sentinel referred to the SEG 1 group as the "125 Portfolio" (named after CFTC Rule 1.25) and the SEG 3 group as the "Prime Portfolio." Bloom , 846 F.3d at 247. SEG 1 was more conservative and intended for FCMs investing their own customers' funds, while SEG 3 offered a higher rate of return at slightly greater risk and was open to Sentinel's non-FCM clients: hedge funds, individuals, and FCMs investing their proprietary, non-customer funds. Id. Clients who invested money into one or more SEGs were promised "an undivided, pro-rata beneficial interest in the pool of securities" purchased using the funds within each SEG. (UBS's SoF ¶ 12.) This meant that Sentinel's investors did not own specific securities outright, but saw their funds "exchanged for securities and interest-bearing cash through a process that Sentinel called 'allocation' " and instead held indirect shares of their respective SEG based on their level of investment. Grede v. FCStone, LLC , 867 F.3d 767, 771 (7th Cir. 2017) (" FCStone II "). In addition to making trades for its clients, Sentinel also traded on its own "House" account for the benefit of corporate insiders, which included the chairman, Philip Bloom; the CEO, Eric Bloom (Philip's son); and the vice president of trading, Charles Mosley. (Trustee's Statement of Additional Material Facts in Opposition to UBS's SoF [112] ("Trustee's SoAF"), ¶ 4.) Sentinel's House account was not constrained by the laws and regulations that governed the grade and risk of investments within the customer SEGs. Bloom , 846 F.3d at 247. Federal law, federal regulations, and Sentinel's client agreements did, however, require all client funds to be segregated from each other as well from Sentinel's House funds. (UBS's SoF ¶ 9) (citing 7 U.S.C. §§ 6d(a) and 6d(b) ; 17 C.F.R. §§ 1.3(gg), 1.20, 1.25, and 1.26(a) ). As has been well documented in more than a dozen published and unpublished opinions dating back to 2009, Sentinel failed to abide by these rules. In 1997, Sentinel opened up a line of credit-called the "overnight loan"-with the Bank of New York for the purpose of providing liquidity for customer redemptions and failed trades. In re Sentinel Management Group, Inc., 728 F.3d 660, 663-64 (7th Cir. 2013) (" BONY I "); (Trustee's SoAF ¶ 11). Although Sentinel at certain points held well over $1 billion in customer assets, it kept very little cash on hand-never more than $3 million. BONY I , 728 F.3d at 663 ; (Trustee's SoAF ¶ 12). This overnight loan from the Bank of New York allowed Sentinel to pay its redeeming clients in cash immediately, rather than after waiting for specific securities to sell. BONY I , 728 F.3d at 664 ; (see also Expert Report of Frances M. McCloskey ("McCloskey Rep."), ¶¶ 64-67, Ex. 2 to UBS Securities, LLC's Response to Trustee's SoAF [121-2] ("UBS's Resp. to Trustee's SoAF").) As acknowledged by the Seventh Circuit, the original overnight loan arrangement "did not violate segregation requirements[:] When a customer cashed out, the amount needed in segregation dropped by the amount lent by the Bank via the line of credit." BONY I , 728 F.3d at 664. Sentinel maintained two types of accounts with the Bank of New York to facilitate this arrangement: segregated accounts and non-segregated accounts. Nine segregated accounts held different asset classes-cash, government securities, and DTC (corporate) securities -for each of SEGs 1, 2, and 3. (Trustee's SoAF ¶ 8.) The four non-segregated accounts included Sentinel's House cash account, as well as several clearing accounts through which Sentinel bought, sold, and transferred securities. (Id. at ¶ 9.) Sentinel also maintained six additional segregated accounts for holding clients' cash at JP Morgan, which will be discussed further below. (Id. at ¶ 10.) Sentinel's primary clearing accounts at the Bank of New York were called the "SEN account" and the "SLM account." (Id. at ¶ 9.) These two accounts operated together to clear transactions and to secure the overnight loan from the Bank. (McCloskey Rep. ¶¶ 64-67.) The SEN account was the clearing account and only held securities or cash during the day. Every evening, Sentinel would zero out the SEN account and transfer securities to the night-time SLM account to secure the overnight loan. At some point, however, Sentinel began securing the overnight loan using the assets in all of the non-segregated accounts, not just the overnight SLM account. BONY I , 728 F.3d at 663. Sentinel's actual use of the overnight loan and its customers' funds bore little resemblance to their purported uses. Bloom , 846 F.3d at 248. Instead of merely facilitating day-to-day liquidity, Sentinel used the overnight loan to purchase "risky securities that did not comply with customers' investment portfolio guidelines." Grede v. FCStone, LLC , 746 F.3d 244, 248 (7th Cir. 2014) (" FCStone I "). Most importantly, beginning in 2001 and increasingly by 2004, Sentinel's management started using the proceeds of the overnight loan "to fund its own proprietary repurchase arrangements." BONY I , 728 F.3d at 664. Repurchase arrangements, or "repos," are transactions in which one party sells a security to another party with an agreement to repurchase the security later, with interest-effectively, another loan with the security acting as collateral. Bloom , 846 F.3d at 248-49 ("The goal was to earn enough income from the additional investments to beat the cost of borrowing. This came with risks.") Sentinel's habit of funding repos with the Bank of New York's loan resulted in highly leveraged portfolio. Id. If (and when) the stock market eventually turned, Sentinel would face losses from both the depreciation of its assets and the cost of borrowing. As described by the Seventh Circuit Court of Appeals in a related case: Sentinel routinely used hundreds of millions of dollars in securities it had allocated to customers as collateral to support Sentinel's own borrowing to pursue its leveraged trading strategy for its own benefit. It moved those securities out of segregation and into a lienable account at the Bank of New York, its main lender, putting customer property at risk for Sentinel's benefit. As Sentinel's leveraged trading increased, its outstanding debt ballooned, and it drew more and more on its customers' assets to support its borrowing habit. FCStone II , 867 F.3d at 772 ; see also Bloom , 846 F.3d at 249-50. The Seventh Circuit called this practice "a flagrant violation of both SEC and CFTC requirements" which left both SEG 1 and SEG 3 "chronically underfunded." FCStone I , 746 F.3d at 248. Sentinel's customers remained unaware of these machinations, as "securities that were serving as collateral for the BONY loan continued to appear on customer statements as if they were being held in segregated accounts for their benefit even though Sentinel was routinely removing them from those accounts." Id. "By the summer of 2007, Sentinel no longer slouched toward bankruptcy; it careened." Bloom , 846 F.3d at 249. The crisis in the subprime mortgage industry spread to the economy as whole, and Sentinel's repo counterparties reacted by pushing their now-worthless securities back onto Sentinel. In June and July 2007, two of Sentinel's largest repo counterparties returned more than $400 million worth of securities to Sentinel, which forced Sentinel to borrow more heavily from the Bank of New York to compensate-always using its customers' property as collateral. Id. ; FCStone II , 867 F.3d at 772. As the summer went on, Sentinel found itself unable to keep up with its customers' redemption requests and BONY's demand for collateral to secure the loan. Id. On August 17, 2007, Sentinel filed for Chapter 11 bankruptcy protection. Sentinel had by then lost more than $600 million of its clients' money, and owed BONY in particular $313 million it had secured with client property. Bloom , 846 F.3d at 245-49. 2. Fraudulent Interest Calculations On top of the segregation violations, Sentinel's officers misbehaved in an additional way: by falsifying the interest earned on the investments in its customers' accounts. Sentinel's marketing materials stated that investors "would receive interest based on a pro rata share of the interest earned only on the securities appearing on their daily customer statements." (Trustee's SoAF ¶ 28); see also Bloom , 846 F.3d at 248. Customers were also assured that there would be "no allocation of profits and losses across the different 'Seg' accounts." Bloom , 846 F.3d at 248. Sentinel did not keep its word. Instead: Sentinel [ ] would calculate the interest earned by all securities, including those belonging to other Segments and the house pool. Sentinel would then guesstimate the yield its customers expected to receive on their group's securities portfolio, add a little extra so that the rate of return seemed highly competitive, and report the customer's pro rata share of that amount, minus fees, on the customer's statement. FCStone I , 746 F.3d at 248 (emphasis in original). The Trustee alleges also that, in addition to falsifying the interest credited to each of the SEGs, "Sentinel's insiders kept for themselves a substantial portion of the interest yield accruing on Sentinel's overall securities portfolio." (Trustee's SoAF ¶ 28; 1/15/10 Expert Report of James S. Feltman ("2010 BONY Feltman Rep."), ¶¶ 64-68., Ex. 1.B. to Trustee's SoAF [112-1].) Sentinel's misleading method of reporting interest has been widely criticized in other lawsuits arising from Sentinel's bankruptcy, on the same bases that the Trustee now cites in opposition to UBS's motion for summary judgment. (See Trustee's SoAF ¶ 28; 2/8/13 Omnibus Expert Report of James S. Feltman ("2013 Omnibus Feltman Rep."), ¶¶ 90-96, Ex. 1.A. to Trustee's SoAF [112-1].) One of the Trustee's expert witnesses, James Feltman, reviewed selected customer accounts from 2005 to 2007, and concluded that "Sentinel allocated interest income to customers by groups at a rate of return that they made up, and which they expected would approximate the amount earned by securities reportedly held in each customer's account." (2013 Omnibus Feltman Rep. ¶ 96.) During the SEC's civil enforcement case against Sentinel and its officers, VP Charles Mosley conceded the same point. SEC v. Sentinel Management Group, Inc. , No. 07-CV-4684, 2012 WL 1079961, at *16 (N.D. Ill. Mar. 30, 2012) (Kocoras, J.). "Mosley admitted that Sentinel would pool the interest generated by the various portfolios, including the House Portfolio, and distribute that interest across the investors' portfolios[, and] further admitted that the interest distributed to investors bore no relation to the interest that the investors' securities had actually accrued." Id. Judge Kocoras granted the SEC's motion for summary judgment based on this admission, finding that Mosley violated sections 17(a)(1)-(3) of the Securities Act, 15 U.S.C. § 77a et seq. , because he "actively and knowingly participated in Sentinel's scheme to defraud its investors, obtained money by means of Sentinel's misrepresentations, and engaged in a course of fraudulent business." Id. The same evidence supported Eric Bloom's criminal conviction. On January 19, 2017, the Seventh Circuit affirmed Bloom's convictions on eighteen counts of wire fraud and one count of investment fraud. Bloom , 846 F.3d at 246. The Court of Appeals concluded that the evidence was sufficient to support the jury's guilty verdict against Bloom on the allegation that he employed "a scheme to manipulate client yield rates by reallocating interest ... in an effort to make the 125 Portfolio seem more lucrative that it was[.]" Id. at 250. The Trustee highlights United States v. Bloom , 846 F.3d 243 (7th Cir. 2017), as particularly relevant to UBS's situation due to the effect Bloom's yield manipulation had on SEG 1: Sentinel used the yields from the house account and the Prime Portfolio [i.e., SEG 3] to inflate artificially the returns from the 125 Portfolio [i.e., SEG 1]. Sentinel's high-risk trading in the house account generated higher returns than the more conservative 125 Portfolio. The Prime Portfolio, which was slightly riskier than the 125 Portfolio, likewise generated higher returns. Sentinel redistributed some of these returns from the house account and the Prime Portfolio to the 125 Portfolio, effectively using the riskier accounts to subsidize the more conservative account. With these inflated rates of return in the 125 Portfolio, Sentinel could attract new clients by outperforming its competition. Indeed, it advertised these rates in its marketing material and on its website. Sentinel employees testified that they doctored the yield rates on a daily basis from 2004 until the company's bankruptcy in 2007. Instead of paying customers the interest they actually earned, Sentinel employees divvied up interest payments according to the instruction of Bloom or Charles Mosley. Bloom in fact created a spreadsheet to help employees calculate how to redistribute funds, which was called the "Daily Yield/Rate Calculation." The spreadsheet listed both the actual interest earned by customers' securities and the rate set by Sentinel. The rate setting often favored the customers in "Seg 1" (125 Portfolio). For example, on December 7, 2006, the interest actually earned by Seg 1 was $96,942.63. After the rate manipulation by Sentinel, that portfolio was allocated $103,832.46. On that same day, Seg 3 (Prime Portfolio) actually earned $148,005.09 in interest and the house account earned $17,949.85. After Sentinel's rate adjustment, Seg 3 customers were paid just $112,657.32 and the house account received $49.11. ... [O]n July 30, 2007, Bloom spoke with an employee who was setting the rates and agreed to inflate the 125 Portfolio to keep it competitive. At the end of that day, Seg 1 actually earned $63,477.53, but was paid $100,420.34 using the interest earned by customers in Seg 3 and by the house account. Another employee testified that he raised the matter with Bloom before May 15, 2007, and Bloom acknowledged that Seg 3 and the house account supplemented Seg 1. (Trustee's Memorandum of Law in Opposition to UBS's Opening Br. [111] ("Trustee's Resp. Br."), 12) (quoting Bloom , 846 F.3d at 252.) The Trustee has not submitted evidence regarding the specific securities that Defendant UBS was supposed to be earning interest on, nor on the exact difference between the interest UBS was allegedly overpaid and the "real" interest rate. Instead, the Trustee argues that because Sentinel was "substantially undersegregated" when it paid the $14.4 million in cumulative interest to UBS on March 30, 2007, it "did not have sufficient funds to return all of its customers' initial investments, let alone interest on those investments." (Trustee's Resp. Br. 21-22.) "Simply put," the Trustee asserts, "there was no interest to pay UBS," and the entire $14.4 million therefore constitutes "false profits." (Id. ; see also Complaint 18-19.) UBS challenges this characterization of the interest earned on its SEG 1 account. (UBS's Opening Br. 8.) At the very least, UBS contends that the Trustee cannot possibly prove his blanket denial of the cumulative interest's legitimacy: "the Trustee has failed to plead or show any facts about the specific amount of alleged 'false profits' transferred to UBS on each of the hundreds of days that UBS invested customer funds in Sentinel." (Id. at 12.) In a related dispute, Grede v. FCStone, LLC , No. 09-CV-136 (the "FCStone test case"), UBS's expert Frances McCloskey concluded that Sentinel acted appropriately when paying interest to its customers. (McCloskey Rep. ¶¶ 273-277.) McCloskey's "analysis of the securities' yields and returns paid to customers revealed that returns from securities on customer statements provided the overwhelming majority of the return paid to customers, but that customer returns in most groups were supplemented in small amounts by Sentinel's House repo portfolio." (Id. at ¶ 274.) McCloskey found no instance in which Sentinel redirected returns from one SEG to another, rather than from Sentinel's own funds to the customer SEGs. (Id. ) McCloskey also repeatedly emphasizes that "Sentinel does not display any of the characteristics that define a Ponzi or Ponzi-like scheme," but was "engaged in a legitimate business [ ] providing investment management to its customers." (Id. at ¶¶ 269-272.) UBS also argues that the Trustee himself has conceded the legitimacy of the cumulative interest through earlier testimony from its expert James Feltman. (Id. at 12-14.) During his deposition in the FCStone test case, Feltman testified as follows: Question: Was there anything improper with Sentinel accruing interest and allocating it to customers on a daily basis? ... FELTMAN: Not from the standpoint of the process. The actual procedure that Sentinel used or the procedure that Sentinel used incorporated examining the entire portfolio of securities it held including interest on repos and taking into account the daily interest charges on the loan and putting that into the overall calculus on a gross and net basis, but at the end of the day Sentinel made, in my view, a significant attempt to match the interest accrued and allocated to customer accounts to the actual earnings that the securities would have reflected for those customers. (Dep. of James Feltman in Grede v. FCStone, LLC , No. 09-CV-136 ("FCStone Feltman Dep."), at 219:4-20, Ex. 22 to UBS's SoF [98-22].) Feltman stood by that conclusion when he testified at the FCStone trial. (UBS's SoF ¶ 30.) The Trustee contends that this quotation was taken out of context, and that Feltman's deposition taken as a whole supports the position he took in his reports: that "interest was fraudulently calculated and paid using the profits on the entire comingled pool, and that the manner in which Sentinel credited interest was designed to avoid suspicions about its illegal activity." (Trustee's Resp. Br. 13.) Immediately after making the statement quoted above, Feltman pointed out that "to the extent that withdrawals included interest earned by a customer, the actual payment of interest was made with comingled funds" because those funds were repeatedly routed into and through the SEN clearing account. (FCStone Feltman Dep. 222:4-10) (discussing proof 14 of the 2013 Omnibus Feltman Report which states: "Interest income was paid to customers with cash from the comingled [SEN account] or other customers' deposits." Id. at 55.) The Trustee also notes Feltman's testimony in the FCStone bench trial. When asked about the interest payments, Feltman stated: "I [ ] concluded that that the interest allocations were items that the company ... created and were not derived from the securities that were on that customer statement for the day"; "they're estimates[,] ... what Sentinel thought their customers would expect"; and that Sentinel allocated interest from the whole pool, not the securities identified on customer statements. (FCStone Trial Tr. 581:5-8, 589:10-12, 591:13-19.) The Trustee concludes that the portion of Feltman's deposition testimony offered by UBS merely shows "that Sentinel tried really hard to appear legitimate"-not that the alleged profits were not fraudulent. (Trustee's Resp. Br. 25.) 3. UBS's Relationship with Sentinel and the March 2007 Transfer Unlike many of Sentinel's clients, UBS managed to withdraw its entire position in SEG 1 well ahead of Sentinel's collapse. The Trustee filed numerous avoidance actions against other SEG 1 investors who received funds on the days immediately surrounding Sentinel's bankruptcy, see e.g. FCStone I , 746 F.3d at 252-54 (holding that various pre- and post-petition transfers were not avoidable); however, those transfers bear little resemblance to the one at issue here. UBS's predecessor, ABN AMRO, Inc., had invested funds with Sentinel since 2000. (UBS's SoF ¶ 11.) UBS acquired ABN AMRO's interest in Sentinel on September 30, 2016. (Id. at ¶ 16.) For the duration of its relationship with Sentinel, UBS was assigned to Group 7 of Sentinel's SEG 1 portfolio. (Id. at ¶ 19.) Like that of all Sentinel's clients, UBS's position was governed by an Investment Agreement that authorized Sentinel to purchase and sell securities for UBS's account and required Sentinel to hold those assets in segregation. (Id. at ¶ 11.) Under the terms of the Investment Agreement, UBS was entitled to redeem its investment at any time. (Id. at ¶ 14) (citing Investment Agreement § 4(b), Ex. 4.A. to UBS's SoF [98-4].) On March 13, 2007-roughly six months after UBS acquired ABN AMRO's interest in SEG 1-several UBS employees circulated an e-mail among themselves which contained internal analyses showing that UBS's investments with Sentinel were earning the highest monthly interest rate among five firms with which UBS had placed investments. (Ex. 40, E-mail from William Frothingham to Robert Gaffney, et al., of 3/13/07, Ex. 40 to Trustee's SoAF [112-42]; UBS Investment Analyses, Ex. 41 to Trustee's SoAF [112-43].) Two weeks later, on March 28, 2007, UBS employee Gregory Hardiman called Sentinel's Sales Manager, Steven Stitle, to discuss pulling UBS's funds from SEG 1. (Trustee's SoAF ¶ 31) (citing Administrator_BloomWAV_42A0, Ex. 42 to Trustee's SoAF [112-44]; Transcript of phone call between Gregory Hardiman and Steven Stitle of 3/28/07 ("Hardiman Call Tr."), Ex. 43 to Trustee's SoAF [112-45].) Their conversation was recorded by Sentinel. Hardiman told Stitle that "[UBS had] made a decision internally to exit the positions" but that UBS would give Sentinel an opportunity to explain how Sentinel was earning their yields in the SEG 1 fund and consider re-entering the fund in the future. (Hardiman Call Tr. 2:9-12.) Stitle asked Hardiman if UBS had any specific concerns, and Hardiman replied that "I think it's more of a ... lack of understanding of [the] detailed positions." (Id. at 3:5-6.) Hardiman continued: My understanding is [Sentinel's] rates of return are fairly high relative to what anybody out there is getting at the moment[,] ... historically. I'd like to understand how you're [ ] achieving that.... The perception would be you're taking more risk as a result, and I'd like to understand what those risks are and where you're picking up your yields ... in the underlying portfolio. (Id. at 5:2-13.) Stitle offered to "put together a team probably with the CEO and myself and ... just shoot out there and do a little dog and pony show," but Hardiman insisted that any future presentation "has to be specific to the portfolio" and that he "would like to see the portfolio manager in there ... explaining what he's doing and how." (Id. at 4:10-21.) Hardiman also provided a list of concerns he had regarding SEG 1: What are the risks, what-where are you at within 125 [the 125 Portfolio, a.k.a. SEG 1], where are you getting the pickup and ... how. So are you going out double A, you know, going all ... the way out on the credit spectrum in terms of 125 and all the way out in terms of duration.... You know, what is it. And-and I believe we'd like to understand that. (Id. at 5:17-6:2.) Stitle assured Hardiman that "those are questions we can answer fairly easily" and that he would contact Hardiman again in a month to set up the presentation. (Id. at 6:16-19.) Immediately after the phone call, Stitle e-mailed Eric Bloom and Charles Mosley stating: Just got off the phone with Greg Hardiman @ UBS. They are pulling the $ $ $ because they are not comfortable with how we obtain the yields we post without incurring some "unknown" level of risk. Greg agreed to give us a chance to explain how we achieve this but is expecting a Q & A session in Stamford with you, me & Charles. I suspect the bulk of the questions will be directed to Charles. ... Conversation was slightly more positive than I expected. Bottom line is that they can't stay invested in a vehicle that they don't fully understand & are [sic] comfortable with. (E-mail from Steven Stitle to Eric Bloom and Charles Mosley of 3/28/07 ("Stitle E-mail"), Ex. 44 to Trustee's SoAF [112-46].) The meeting never occurred. On March 30, 2007-two days after the call-UBS withdrew its entire stated account balance from Sentinel: $108,387,950.97. This amount included the $14,401,341.15 worth of cumulative interest credited to UBS's account that the Trustee now seeks to avoid. (Trustee's SoAF ¶ 33.) Later, in August 2007, Hardiman discussed the news of Sentinel's then-recent collapse in an e-mail to a coworker: "Hope people realize the value added by exiting the Sentinel fund ... Don't think people really appreciate/understand what could have been and the headache, potential issues/losses avoided here. People should be aware that we performed due diligence on the fund and made an informed decision to exit." (E-mail from Gregory Hardiman to Kevin Maloney of 8/16/07, Ex. 46 to Trustee's SoAF [112-48].) In another e-mail summarizing UBS's financial position in light of the overall market downturn over the summer of 2007, Hardiman repeated his claim that "[a]fter due diligence performed, we exited Sentinel in Q107, avoiding a potentially large loss." (E-Mail from Gregory Hardiman to James Buckland, et al., of 8/23/07, Ex. 47 to Trustee's SoAF [112-49].) Another employee then talked up Hardiman's work to others, stating: "We inherited a $100mm placement with Sentinel with the ABN merger that Greg decided to exit in Q1 due to his concerns about the funds." (E-mail from John Laub to Daniel Coleman, et al., of 8/23/07, Ex. 48 to Trustee's SoAF [112-50].) The parties dispute the relevance and meaning of this evidence. The Trustee argues that these internal communications reveal Sentinel's fraudulent intent when making the transfer, as the phone calls and emails establish that UBS was "suspicious" of the generous returns Sentinel was earning, and created an incentive for Sentinel's managers to cover up their segregation violations and fraudulent interest calculations by paying UBS all of what Sentinel (wrongfully) said UBS was owed. (Trustee's Resp. Br. 14-15.) UBS argues that the communications are irrelevant as they only speak to UBS's intent when requesting the transfer, and that, at best, they merely "confirm that the reason UBS closed its account with Sentinel was because it was unfamiliar with Sentinel and did not fully understand Sentinel's investment process." (UBS's Resp. to Trustee's SoAF ¶¶ 31-34.) In addition to providing Sentinel and UBS's internal communications regarding the transfer, the Trustee also supplies evidence regarding the origin of the money Sentinel used to pay UBS. The Trustee, through an expert witness, Anne Rasho Vanderkamp, claims that the money used to pay off UBS's account did not come from an account segregated for SEG 1. (Decl. of Anne Rasho Vanderkamp ¶ 5 ("Vanderkamp Decl."), Ex. 45 to Trustee's SoAF [112-47].) Rather, the money originated in a SEG 3 cash account-meaning that Sentinel paid UBS with other customers' money. (Id. ) As mentioned above, Sentinel maintained six segregated cash holding accounts at JP Morgan in addition to its numerous accounts at the Bank of New York. (Trustee's SoAF ¶ 10; McCloskey Rep. ¶¶ 53, 58-59.) The parties agree on most characteristics of these accounts. The JP Morgan cash accounts "were non-transactional, meaning that their sole purpose was to hold customer cash in segregation." (Trustee's SoAF ¶ 10.) Three of them were non-interest bearing; the other three did bear interest and were linked to a corresponding non-interest account. (McCloskey Rep. ¶ 58.) One of the non-interest bearing, segregated accounts was called the "Sentinel Management Group, Inc. III-1.2" account, number 304-653403 (the "JP Morgan SMG III account"). (Id. ) On March 30, 2007, Sentinel transferred $120 million from the JP Morgan SMG III account to the SEN clearing account at the Bank of New York. (Trustee's SoAF ¶ 33.) From there, Sentinel transferred $127.6 million from the SEN account to Sentinel's SEG 1 segregated cash account at the same bank. (Id. ) Sentinel then wired the full $108,387,950.97 redemption payment from that cash account to UBS. (Id. ) The parties' factual agreement ends there. The Trustee alleges that the cash in the JP Morgan SMG III account (and its paired interest-bearing account) was supposed to remain segregated for the benefit of Sentinel's SEG 3 customers. (Trial Tr. in Grede v. FCStone, LLC , No. 09-CV-136 ("FCStone Trial Tr."), 205, 708, Ex. 4 to Trustee's SoAF [112-4]; Deposition of Jeff Logan in SEC v. Sentinel Management Group, Inc. , No. 07-CV-4684 ("SEC Logan Dep."), 202:10-203:10, Ex. 10 to Trustee's SoAF [112-10].) UBS was not a SEG 3 customer. The Trustee claims that the other two sets of JP Morgan accounts were segregated for SEGs 1 and 2, respectively. (Id. ) The Trustee also claims that the March 30, 2007, cash transfers that facilitated Sentinel's payment to UBS left SEG 3 undersegregated by $386,800,000-with just 45% of the assets allocated to SEG 3 on paper actually being held in segregation for the benefit of SEG 3's investors. (Vanderkamp Decl. ¶ 9.) After the transfer to UBS, SEG 1 itself was also left undersegregated by 29%. (Id. at ¶ 8.) UBS responds that the Trustee mischaracterizes the nature of the JP Morgan accounts. UBS asserts that, despite the name "SMG III," the JP Morgan SMG III account was open to cash from either of SEGs 1 or 3. (UBS's Resp. to Trustee's SoAF ¶ 8.) "While Sentinel's internal account naming labeled that account as SEG 3 [or "III"], the account was not used that way." (Id. at ¶ 33.) Rather, SMG III was the third account opened with JP Morgan, and duplicates the role held by another account-number 323-961355, "Sentinel Management Group, Inc.-1.20" ("SMG 1.20")-which was already serving both SEG 1 and SEG 3. (Id. at ¶¶ 8, 33; McCloskey Rep. ¶ 58.) UBS asserts that the Trustee's position represents a continued misunderstanding of the nature of Sentinel's pro rata investment scheme: "the Trustee fails to acknowledge that the key function of the daily allocation of securities [is] that all deposits on account are invested in a pool of securities, the composition of which is flexible from day-to-day in order to free up cash." (UBS's Resp. to Trustee's SoAF ¶ 33) (citing McCloskey Rep. ¶¶ 100-112, 216-217.) UBS supports its view of the true nature of the JP Morgan SMG III account with further evidence from its expert report by Frances McCloskey in the FCStone test case. According to that report, of the three sets of paired accounts at JP Morgan, only one set was reserved for a single SEG-and that set was titled "Sentinel Management Group, Inc.-30.7" and segregated only for SEG 2 funds. (McCloskey Rep. ¶ 58) (stating that the accounts were so named because they were "compliant with CFTC Rule 30.7 (i.e. for SEG 2 cash).") UBS also notes findings from a 2006 National Futures Association ("NFA") audit of Sentinel's accounts, in which the auditors acknowledged the pooling of SEG 1 and SEG 3 cash in the SMG 1.20 account but did not cite it as a violation requiring corrective action. (7/24/06 Summary of Audit Findings ("July 2006 NFA Audit"), Ex. 11 to UBS's Resp. to Trustee's SoAF [122-1].) Examining much of the same evidence, Judge Zagel in the FCStone test case sided against the Trustee, and found that while one of the JP Morgan accounts was segregated for SEG 2, the other two "non-interest bearing accounts and their interest bearing counterparts were available to be used for both SEG 1 and SEG 3 customer funds." Grede v. FCStone, LLC , 485 B.R. 854, 862 (N.D. Ill. 2013), rev'd on other grounds, FCStone I , 746 F.3d 244 (7th Cir. 2014). Finally, UBS notes that several other Sentinel clients withdrew funds from Sentinel between February and April 2007. These other transfers were substantially smaller that UBS's, ranging in amount from $1.2 to $11.2 million, but UBS contends they demonstrate that the March 30 UBS transfer was simply business as usual. (UBS's SoF ¶ 22; UBS Securities, LLC's Reply in Support of its Motion for Summary Judgment [120] ("UBS's Reply Br."), 13 n.5.) The early 2007 transactions occurred several months before Sentinel's repo counterparties returned hundreds of millions of dollars' worth of high-risk, illiquid securities and demanded hard cash in return-the event that ultimately brought down the firm. See FCStone I , 746 F.3d at 249-49 ; Bloom , 846 F.3d at 249. It is also undisputed that Sentinel's officers "remained substantially invested in Sentinel" until at least the summer of 2007. (UBS's SoF ¶ 23.) On July 18, 2007, Chairman Philip Bloom suddenly withdrew $11.3 million, "the majority of the funds in the [H]ouse account." Bloom , 846 F.3d at 253. CEO Eric Bloom "likewise made unusual withdrawals" in June and July 2007, giving himself an early bonus and retroactive raise in amounts totaling $250,000. Id. The timing of these insider withdrawals, UBS contends, also shows that "no financial crisis or market pressure" existed until months after UBS's withdrawal, when Sentinel's repo counterparties pushed back the risky securities. (UBS's Reply Br. 23.) As a result, UBS claims, "there is no evidence that Sentinel did anything unlawful or extraordinary to satisfy UBS's redemption request, or that it had a detrimental impact on Sentinel's other customers." (Id. ) PROCEDURAL BACKGROUND 1. Early Bankruptcy Court Proceedings Sentinel filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on August 17, 2007. After a flurry of early litigation and distributions authorized by the bankruptcy court, the relevant stakeholders approved a plan to liquidate Sentinel's remaining assets on December 11, 2008. (Order Approving Chapter 11 Plan [1257] in In re Sentinel Management Group, Inc. , No. 07-BR-14987, 1.) The Liquidation Plan was approved over the objections of numerous SEG 1 investors (the "SEG 1 Objectors"), many of whom were later involved in the FCStone test litigation to sort out the issues arising under the Plan. Because UBS closed its account ahead of Sentinel's bankruptcy, it never filed claims against the estate and so was not involved with the Plan's approval. (UBS's SoF ¶ 31.) As a result, most of the provisions in the Liquidation Plan are not relevant to this dispute. UBS highlights one portion, however, as evidence that the Trustee should be judicially and collaterally estopped from challenging the legitimacy of the cumulative interest as "false profits." (UBS's Opening Br. 21-24.) At a hearing prior to the Plan's approval, the Trustee argued in favor of "computing customer claims based on account balances as of the last date customers saw them [August 13, 2007], minus any withdrawals that they had up through the petition date." (Transcript of Proceedings on 8/13/08 ("8/13/08 Hearing Tr."), 35:13-16, Ex. 20 to UBS's SoF [98-20].) The Trustee's proposal prevailed: the approved Liquidation Plan stated that "[f]or the purposes of calculating Adjusted Percentage Recoveries and Percentage Recoveries, and for purposes of making Initial Distributions and establishing reserves, each Class 3 Customer Claim shall equal the amount listed as 'Net Equity' on such Holder's Customer Account Statements dated August 13, 2007." (Fourth Amended Plan of Liquidation [1251] in In re Sentinel Management Group, Inc. , No. 07-BR-14987 ("Liquidation Plan"), § 4.4.) Under this calculation, claims included the interest that appeared on customer accounts. (UBS's Opening Br. 21, 23.) UBS argues that the Trustee is therefore estopped from taking the "wholly inconsistent position" that the cumulative interest constituted "false profits." (Id. at 22.) The Trustee responds that UBS selectively misreads his testimony and misstates the actual terms of the Liquidation Plan. (Trustee's Resp. Br. 30.) Neither his hearing testimony nor the Plan, the Trustee states, concede the legitimacy of the cumulative interest. (Id. ) Instead, the Trustee insists that his testimony addressed the limited question of whether initial distributions and reserves under the Plan would be calculated using a "net investment" methodology (based on the amounts invested and appearing on customer accounts) or a "net equity" methodology (based on the hypothetical liquidation value of the securities). (Trustee's Resp. to UBS's SoF [114], ¶ 26; 8/13/08 Hearing Tr. at 32:17-36:2.) The Trustee claims that he argued for the net investment method because using the net equity alternative "would have unfairly punished customers to whose accounts illiquid and valueless securities unlawfully had been allotted." (Trustee's Resp. Br. 30.) Later at the same hearing cited by UBS, counsel for the Trustee explained: [We] are talking about treating everybody equally, we are talking about the amount that they put into Sentinel. In this case the customer put $18.5 million into Sentinel. We are not talking about respecting the account statements that are completely fraudulent, that everyone in this courtroom knows were completely fraudulent. On this day, this account statement said there was a bunch of junk in junk trading account. On a different day, it said something different. These are made up. So we are not treating everybody equally based on Eric Bloom's lies to the customers. We are treating everybody based on what they put into the company. (8/13/08 Hearing Tr. 176:19-177:8.) The bankruptcy court ultimately approved the Trustee's preferred net investment-based claim calculation over the objection of the SEG 1 investors. (Trustee's SoAF ¶ 35.) The Trustee maintains, however, that his decision to support the net investment methodology cannot be interpreted as an admission to the accuracy of Sentinel's customer statements-and therefore the cumulative interest. Rather, he only chose to utilize customer account balances "because it was the most expedient and cost-effective method to make initial distributions" given Sentinel's extensive comingling of customer funds. (Trustee's Resp. Br. 31); see also In re Sentinel Management Group, Inc. , 398 B.R. 281, 310-14 (Bankr. N.D. Ill. 2008). The Trustee claims that this understanding was built into the Liquidation Plan, and cites the mandatory Disclosure Statement referenced in the Plan, which reads in relevant part: [A]s tested by the Plan Proponents over the three and a half year period of time preceding the Petition Date, the notional value that Sentinel reported to Sentinel's Customers on its monthly account statements closely approximated Customers' "net investment" Claim measured over the same period.... Given the proximity of the amount reported to Customers by Sentinel on their customer statements to their actual "net investment" (when provision is made for time value of money), and due to the unreliable and incomplete nature of Sentinel's books and records (which would obfuscate any attempt to arrive at a perfectly accurate measurement of "net investment"), the Plan Proponents believe that the amount reported by Sentinel on Customers' account statements is in fact the most efficient, equitable method to calculate Customer Claims. (Disclosure Statement [592] in In re Sentinel Management Group, Inc. , No. 07-BR-14987, at 31.) UBS responds that whatever the Trustee's reasons may have been, "the Plan's effect was to legitimize the cumulative interest." (UBS's Reply Br. 25) (emphasis in original). 2. The Present Complaint On June 24, 2009, the Trustee filed the present adversary proceeding against UBS in bankruptcy court. (Complaint 22.) On November 4, 2009, Judge Zagel of this court entered an order withdrawing the reference of this dispute from the bankruptcy court. (11/4/09 Order, Ex. 24 to UBS's SoF [98-24].) UBS originally moved for summary judgment [32] in June 2012. Judge Zagel held that motion under advisement for several years as two related cases traveled back and forth on appeal. The case was reassigned to this court on April 25, 2017, after Judge Zagel took senior status. This court then struck UBS's summary judgment motion without prejudice and ordered the parties to re-brief the motion. (5/19/17 Status Hearing [92].) The Trustee's complaint against UBS alleged three counts in connection with Sentinel's transfer of $14,401,342.15 in cumulative interest on March 30, 2007. Count I sought to avoid the payment as an actual fraudulent transfer under 11 U.S.C. § 548(a)(1)(A), Count II sought to avoid the same transfer as constructively fraudulent under Section 548(a)(1)(B), and Count III sought the disallowance of any claims that UBS had against Sentinel's estate. (Complaint 18-22.) Based on the Seventh Circuit's opinion in FCStone I and the lack of any claims by UBS against the bankrupt estate, the Trustee has admitted that the court should dismiss Counts II and III. (See Trustee's Omnibus Response to Defendants' 2012 Motions for Summary Judgment [36], 26; Trustee's Sur-Reply to 2012 Motions for Summary Judgment [63-1], 5 n.3.) Only Count I, alleging an actual fraudulent transfer, remains at issue in UBS's motion for summary judgment. Count I asserts that Sentinel's managers acted with the "actual intent to hinder, delay, or defraud" Sentinel's other investors. That claim rests on three core theories: (1) that the entire cumulative interest total consists of "false profits"; (2) that Sentinel made the transfer in order to cover up and perpetuate its fraud after UBS "became suspicious of Sentinel's business"; and (3) that Sentinel made the transfer using funds belonging to a different class of investors. (Complaint 8-13; Trustee's Resp. Br. 18-23.) UBS's motion for summary judgment asserts that the Trustee alleges only a "general scheme to defraud" and that the Trustee has not established a genuine dispute of material fact as to Sentinel's intent regarding the specific transfer at issue in this case. (UBS's Opening Br. 2-3.) UBS further argues that the Trustee is estopped from arguing that the interest paid to UBS was anything but genuine based on the results of-and the Trustee's statements during-related litigation. Overall, UBS describes Count I as "merely a poorly disguised preference claim" that the Trustee pleaded as a fraudulent transfer in order to avoid the 90-day limitations period applicable to bankruptcy preference actions. (Id. at 3.) DISCUSSION 1. Legal Standard Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56. In ruling on a motion for summary judgment, the court views the evidence in the light most favorable to the non-moving party-here, the Trustee-and draws all reasonable inferences in the non-moving party's favor. Gillis v. Litscher , 468 F.3d 488, 492 (7th Cir. 2006) (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A genuine dispute of material fact exists where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Carroll v. Lynch , 698 F.3d 561, 564 (7th Cir. 2012). The Trustee sued to avoid Sentinel's payment of $14.4 million in cumulative interest to UBS as an actual fraudulent transfer under 11 U.S.C. § 548(a)(1)(A). In order to prevail and claw back the $14.4 million to the liquidation trust, the Trustee must prove that Sentinel acted "with actual intent to hinder, delay, or defraud" its other creditors. Id. On a fraudulent transfer claim, "[d]irect proof of actual intent to defraud is not required-indeed, it would be hard to come by-and a trustee can prove actual intent by circumstantial evidence." Frierdich v. Mottaz , 294 F.3d 864, 869-70 (7th Cir. 2002). Courts will often look to the "badges of fraud" as circumstantial evidence of intent. Id. The intent to defraud "will be found if the circumstances indicate that the main or only purpose of the transfer was to prevent a lawful creditor from collecting a debt." King v. Ionization Intern., Inc. , 825 F.2d 1180, 1186 (7th Cir. 1987). Sentinel's intent when making the transfer is a question of fact. See id. This court recognizes that "summary judgment ought to be used sparingly and with great caution in cases such as this one where subjective intent is a factor in the determination." Alexander v. Erie Ins. Exchange , 982 F.2d 1153, 1160 (7th Cir. 1993) ; see also Allstate Ins. Co. v. St. Anthony's Spine & Joint Inst. , No. 06 C 7010, 2010 WL 3274283, *3 (N.D. Ill. Aug. 17, 2010) (denying the defendant's motion for summary judgment in an actual fraudulent transfer case). A district court is nevertheless "not obliged to entertain a 'metaphysical doubt.' " Alexander , 982 F.2d at 1160. Even in cases involving subjective intent, "summary judgment is not inappropriate where the undisputed facts make the outcome clear." Id. (affirming summary judgment where the evidence was not sufficient to permit a jury to conclude that the defendant possessed the subjective intent to defraud). 2. UBS's Legal Arguments As a preliminary matter, UBS asserts that numerous legal doctrines apply to bar-either in part or in whole-the Trustee's claim to avoid the cumulative interest transfer, regardless of the evidence. None of UBS's arguments are successful, although some do apply to narrow the scope of the court's inquiry. The court will address all of them in brief. a. The Trustee's new theories do not "effectively amend" the Complaint UBS argues that summary judgment should be granted in its favor on the two new theories of recovery raised by the Trustee for the first time in his brief in opposition to UBS's motion for summary judgment. (UBS's Reply Br. 15.) UBS claims these two "new theories" are that "(1) Sentinel was allegedly 'undersegregated' at the time of the March 30 Transfer; and (2) funds for the March 30 Transfer allegedly came from a 'SEG 3 cash account.' " (Id. ) UBS is correct that a plaintiff is not free to assert wholly new claims in briefs opposing a motion for summary judgment. Shanahan v. City of Chicago , 82 F.3d 776, 781 (7th Cir. 1996). That is not what the Trustee has done here, however. The Trustee's claim-that the $14.4 million transfer was made with fraudulent intent and must be avoided-remains the same. The Trustee pleaded the core facts of the transfer at issue, its amount, and specifically alleged that "[s]ecurities were not segregated, and the investment returns were false." (Complaint ¶¶ 1, 61.) The Trustee has since discovered evidence of undersegregation and the source of the transferred funds, but this evidence does not contradict his core claim; it supplements his claim. Furthermore, even assuming that UBS is correct that the Trustee's arguments are "new theories" rather than mere "evidence," plaintiffs are not required to plead specific legal theories in their complaints. Avila v. CitiMortgage, Inc. , 801 F.3d 777, 783 (7th Cir. 2015). Even post- Twombly , Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a plaintiff is "not required to plead with precision legal theories or detailed facts." Benuzzi v. Bd. of Educ. of City of Chicago , 647 F.3d 652, 664 (7th Cir. 2011). Having pleaded facts sufficient to state a plausible claim for relief, the Trustee is within his rights in developing his case further through discovery and defending his claim with those facts at the summary judgment stage. See Vincent v. City Colleges of Chicago , 485 F.3d 919, 923 (7th Cir. 2007) ("Factual detail comes later-perhaps in response to a motion for a more definite statement, ... perhaps in response to a motion for summary judgment.") b. The Trustee is not estopped from arguing that the cumulative interest was fraudulent UBS also argues that the Trustee is estopped from disputing the validity of the cumulative interest based on "admissions" by its expert, James Feltman, and by the Liquidation Plan. With respect to each of these issues, UBS has overstated its case. First, UBS notes that during his deposition in the FCStone test case, Feltman acknowledged that Sentinel made "a significant attempt to match the interest accrued and allocated to customer accounts to the actual earnings that the securities would have reflected for those customers." (FCStone Feltman Dep. at 219:4-20.) UBS urges that this "admission" is binding on the Trustee and defeats his claim that all of the interest earned by UBS's investments and credited to UBS's account over the course of several years constitutes 'false profits.' " (UBS's Opening Br. 13.) As the Trustee notes, however, UBS is taking this passage out of context. Feltman's testimony as a whole clearly establishes his view that he viewed Sentinel's method of allocating interest to be fraudulent. (FCStone Feltman Dep. 222:4-10.) Feltman's two expert reports reinforce this idea at length (see 2013 Omnibus Feltman Rep. ¶¶ 90-96; 2010 BONY Feltman Rep. ¶¶ 64-68), and, most importantly, several courts have already found that Sentinel's managers did, in fact, regularly falsify the interest they credited to customer account. See SEC v. Sentinel , 2012 WL 1079961, at *16 ; Bloom , 846 F.3d at 250-52 ; FCStone II , 867 F.3d at 789. Viewing Feltman's admission in the light most favorable to the Trustee, the court agrees with the Trustee's interpretation of that testimony: "that Sentinel tried really hard to appear legitimate." (Trustee's Resp. Br. 25.) As will be discussed in detail, the court concludes that Feltman's testimony does not prove exactly what the Trustee wants it to prove. For the purposes of UBS's estoppel argument, however, this cherry-picked portion of Feltman's deposition does not bar the Trustee from arguing that Sentinel fabricated the precise amount of interest credited to customer accounts. UBS's second estoppel argument focuses on the Liquidation Plan advanced by the Trustee. The Liquidation Plan fixed customer claims by whatever amount was listed as "Net Equity" on their final account statement before Sentinel filed for bankruptcy-i.e., their account balance. (Liquidation Plan § 4.4.) This amount includes the cumulative interest sum that the Trustee now seeks to avoid. UBS argues that the Trustee may not insist that the interest is legitimate for the purposes of distribution to creditors under the Plan, but not for the pre-petition transfer to UBS. (UBS's Opening Br. 21.) Accordingly, UBS claims that the Trustee should be judicially and collaterally estopped from claiming that the cumulative interest sum constituted "false profits" in this case. (Id. at 22.) Judicial estoppel applies to prevent parties from advancing arguments that contradict arguments they prevailed on in an earlier matter. Wells v. Coker , 707 F.3d 756, 760 (7th Cir. 2013). Collateral estoppel applies to bar relitigation of issues that were resolved in a previous lawsuit. Adams v. City of Indianapolis , 742 F.3d 720, 736 (7th Cir. 2014). The Trustee would be judicially estopped if his current position regarding the fraudulent nature of the cumulative interest transfer were "clearly inconsistent" with the position he took before the bankruptcy court. Janusz v. City of Chicago , 832 F.3d 770, 776 (7th Cir. 2016). The Trustee would be collaterally estopped if the question of whether Sentinel allocated fraudulent interest raises the "same issue" as the method of determining customer claims for purposes of liquidating the firm. Adams , 742 F.3d at 736. Neither the inconsistency required for judicial estoppel nor the identity of issues required for collateral estoppel is present in this case. As with Feltman's testimony, UBS misinterprets the source material. The Liquidation Plan indeed uses customers' account balances, but does so only in three limited contexts: calculating "Percentage Recoveries," making initial distributions, and establishing reserves. (Liquidation Plan § 4.4.) Claims must also still be "allowed" under the Plan in order to be paid. In addition, the Trustee never argued that the interest was legitimate; instead, he took the position that, given the "extensive commingling," the account statements served as "the most expedient and cost-effective method to make initial distributions." (Trustee's Resp. Br. 31.) In the hearing prior to the Plan's approval, counsel for the Trustee nevertheless clarified that the account statements were "completely fraudulent." (8/13/08 Hearing Tr. 176:19-177:8.) It is also clear from that hearing that the focus of the debate was the choice between the Trustee's "net investment" methodology and the SEG 1 Objectors' preferred "net equity" method of setting claims. (Id. at 32:17-36:2.) Either one of these methods necessarily relied on Sentinel's account statements for some purpose: for net equity, the specific securities allocated to each account would be relevant; for net investment, only the overall balance matters. See In re Sentinel Management Group, Inc. , 398 B.R. at 310-314. The bankruptcy court found net investment to be the superior method because it was relatively fairer to the investors at a point when asset tracing was considered impossible. Id. at 313-14. The approved Plan's Disclosure Statement states outright that the account balances were an imperfect tool, and merely "approximated" a customer's actual net investment as reflected in Sentinel's "unreliable and incomplete" records. (Disclosure Statement 31.) Given this evidence, it is entirely consistent for the Trustee to use a figure that included cumulative interest in connection with liquidating Sentinel while recognizing that Sentinel's procedures allocating that interest were fraudulent. c. Entitlement to be paid is not an absolute defense UBS also asserts that it was legally impossible for Sentinel to have acted with fraudulent intent when making the March 30 transfer, "because it was merely complying with a redemption request that it did not initiate and was legally and contractually required to honor." (UBS's Opening Br. 2.) The repayment of an antecedent debt, UBS claims, cannot be a fraudulent transfer as a matter of law. (Id. ) UBS's position runs contrary to well-established Seventh Circuit case law. The court has long recognized that "a transfer by a debtor to one creditor, even though for consideration, is still a fraud against other creditors if there is an intent to defraud." King , 825 F.2d at 1186 ; see also Scholes v. Lehmann , 56 F.3d 750, 757 (7th Cir. 1995) (discussing the theoretical differences between actual and constructive fraud). So long as the Trustee can raise a reasonable inference of actual fraudulent intent, the transfer may be avoided. Challenging this principle, UBS cites B.E.L.T., Inc. v. Wachovia Corp. , 403 F.3d 474 (7th Cir. 2005), for the proposition that "where a debtor transfers funds to a non-insider third-party creditor in payment of an antecedent debt in an arm's-length transaction, there can be no claim that the transfer was made with 'actual intent to hinder, delay, or defraud any [other] creditor of the debtor.' " (UBS's Reply Br. 3.) The facts in B.E.L.T. share many similarities with the situation here, but its holding did not create a bright line rule. The district court had dismissed the creditor's complaint because it failed to plead fraud with particularity. B.E.L.T. , 403 F.3d at 478. The Seventh Circuit affirmed, finding that the plaintiff's complaint failed to allege facts that spoke to the debtor's motive in paying the defendant, and, alternatively, failed to adequately demonstrate that the debtor's behavior reflected recognized badges of fraud. Id. The Seventh Circuit did not abandon its earlier jurisprudence, and did not conclude that transfers to parties entitled to receive payment on accoun