No. 79-01256-BKC-SMWUnited States Bankruptcy Court, S.D. Florida
February 29, 1980
Bankruptcy Reform Act — Discharge — Concealment of Property — Fraudulent Transfer
WEAVER, Bankruptcy Judge
An officer of a debtor corporation acted with the intent to hinder, delay and defraud creditors within the meaning of Section 548 of the Bankruptcy Code by transferring the debtor’s property to hereself without giving the corporation the fair equivalent value of the property. Further, the officer is liable to the debtor for causing it to prosecute this action to recover its assets. See Sec. 548 at ¶ 9540.
[Digest of Opinion]
The creditor, who was the officer of this Chapter 11 debtor’s property, and having reasonable cause to believe the debtor was insolvent at the time of making this transfer did unlawfully convey the property with the intent to hinder, delay and defraud creditors within the meaning of Section 548 of the Bankruptcy Act. The court found that the debtor received less than a reasonable equivalent value in exchange for such transfer and as a result was made to prosecute this action in order to recover the principal assets of the corportion. Further, the debtor, denied the use and free enjoyment of the title to the property, was rendered unable to negotiate for the sale of the property or with its secured creditors, thereby incurring the liability represented by its mortgage indebtedness interest.
Consequently, the court held that the transfer was fraudulent, and the creditor’s actions were performed wilfully and maliciously, and in wanton disregard of the lawful rights of the other stockholders and creditors of the debtor. Accordingly, the debtor was declared to be the fee simple owner of the property.