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Trustee John S. Lovald v. Border Line, Ltd. (In re James P. Grinnell and Tammy L. Grinnell)

Bankr. No.: 
04-41414
Adv. No.: 
05-4006
Chapter: 
7
Date of Decision: 
July 20, 2005
Issue: 
Whether the debtors’ turnover of their store’s inventory to the former store owner constituted a fraudulent conveyance under 11 U.S.C. §§ 548(a)(1)(B) and 550(a)?
Ruling: 
The transfer was a fraudulent conveyance because the former store owner, who received the store realty and some equipment back after the debtors defaulted on the sale contracts, did not pay the debtors anything for the inventory. The Court calculated the value of the inventory on the transfer date based on the evidence presented and ordered the former store owner to reimburse the bankruptcy estate for that amount.
Full Bankruptcy Court Decision: