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Trustee Forrest C. Allred v. Camille Nickeson, Lee Nickeson, James L. Nickeson Farms, Inc., and LLJ, LLP (In re James Lee Nickeson)

Bankr. No.: 
13-10137
Adv. No.: 
14-1004
Chapter: 
7
Date of Decision: 
May 28, 2015
Issue: 
(1) Whether the debtor's transfer of his majority ownership interest in a farm corporation was actually fraudulent under 11 U.S.C. § 548(a)(1)(A) and 11 U.S.C. § 544(b) and S.D.C.L. § 54-8A-4(a)(1)? (2) Whether the transfer of the debtor's interest was constructively fraudulent under 11 U.S.C. § 548(a)(1)(B) and 11 U.S.C. § 544(b) and S.D.C.L. § 54-8A-4(a)(2)? (3) Whether the Chapter 7 trustee is permitted, under 11 U.S.C. § 550(a), to recover for the benefit of the estate the interest transferred by the debtor?
Ruling: 
(1) Yes, several badges of fraud were present and no "legitimate supervening purpose" for the debtor's transfer of his interest in the farm corporation was shown; (2) Yes, the value of the interest transferred by the debtor greatly exceeded the value the debtor received in exchange for his interest; (3) Yes, the Chapter 7 trustee shall recover for the benefit of the estate the interest transferred by the debtor.
Full Bankruptcy Court Decision: