Section 544 (strong-arm power)

Section 544 of the U.S. Bankruptcy Code, known as the "strong-arm power," allows a bankruptcy trustee to challenge certain claims on assets. This section enables the trustee to act like a hypothetical lien creditor or a bona fide purchaser of property, effectively stepping into the shoes of creditors. The trustee can undo transactions that occurred before the bankruptcy filing, reclaiming assets for the estate. This power helps ensure that all creditors are treated fairly, prioritizing their rights and interests while maximizing the value of the bankruptcy estate for distribution.