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Trustee John S. Lovald v. Neil F. Schmidt, Jr., Viking Aircraft Owners, LLC (In re Viking Glass, Inc. and SNE Enterprises, Inc.)

Bankr. No.: 
97-40115
Adv. No.: 
98-4011
Chapter: 
7
Date of Decision: 
May 7, 1999
Issue: 
Whether a constructively fraudulent transfer occurred when Debtor sold a subsidiary to Debtor's sole director and SOLE common shareholder and whether the director breached his fiduciary duty to Debtor in regards to the sale?
Ruling: 
The transfer was constructively fraudulent under ยง 548(a)(1)(B) because Debtor did not receive the reasonably equivalent value for the subsidiary [earlier decision resolved other elements of a constructively fraudulent transfer]. Debtor's sole director also breached his fiduciary duty to Debtor because he did not insure that Debtor received a fair price for the subsidiary.
Full Bankruptcy Court Decision: