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Trustee John S. Lovald v. Rolland E. Jensen and J.R. Rawlins, Inc. (In re Thomas W. Tyler)

Bankr. No.: 
98-40686
Adv. No.: 
00-4007
Chapter: 
7
Date of Decision: 
May 25, 2000
Issue: 
In an individual bankruptcy filed by the sole shareholder, director, and officer of a closely-held corporation, was the pre-petition sale of the closely-held corporation's "book of business" a fraudulent transfer within the meaning of 11 U.S.C. § 548(a)(1)(B)?
Ruling: 
The sale of the closely-held corporation's "book of business" was not a fraudulent transfer within the meaning of 11 U.S.C. § 548(a)(1)(B). Under South Dakota state law, shareholders, directors, and officers of a corporation do not have an interest in corporate assets. Thus, the sale did not involve a "transfer of an interest of the debtor in property."
Full Bankruptcy Court Decision: