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: