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Terry Properties, LLC v. Farm Credit of the Virginias, ACA (In re Terry Properties) (Case No. 16-71449; A.P. No. 16-07038) 2/3/2017

This matter was before the Court on cross motions for summary judgment filed by the parties in connection with a complaint to avoid certain transfers by the Debtor to the creditor as fraudulent or voluntary conveyances pursuant 11 U.S.C. §§ 544 and 548 and Va. Code §§ 55-80 and 55-81 stemming from the recordation of a deed of trust modification.  The Debtor asserted that due to a lag between the time the deed conveying the real estate to the Debtor was recorded and the time the deed of trust modification was recorded, the recordation of the deed of trust modification rendered it insolvent or with unreasonably small capital. The creditor asserted that the Debtor received its real estate subject to the existing deed of trust liens; thus no transfer occurred. The Court granted the creditor’s motion for summary judgment, finding that the Debtor agreed to acquire the real estate subject to Farm Credit's liens as part of a single, unified transaction. The Court focused on (i) whether there was a transfer of an interest of the Debtor in property that would have been preserved but for the transaction with the creditor, and (ii) whether the net effect of the transaction depleted the Debtor's estate. The Court concluded that the answer to both questions is no.  The Debtor’s motion for summary judgment was denied. The Debtor’s motion to amend the complaint was also denied on the grounds that the proposed amendment would be futile.

Friday, February 3, 2017
Fraudulent Conveyance