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: