## F I LED United States C ourt of Appeals Tenth Circuit 

### Ju n e5,2007 Elisab eth A. Shumaker C l erk of C ourt PU BL I SH UNI TED S TATES CO URT O F AP PEALS

T E N T H C IR C U IT In r e: R O N A L D K E N T K U N Z , al so k n o wn a s R. Ke n tKu n z , a l s o k n o wn as K entK unz, al s o know n as K . K unz, al s o know n as R . K unz,

D eb tor,

--- --- --- --- --- --- --- --- - ST E PH E N W . R U PP, T rus t ee,

P lain tiff - A p p e llan t, v. UNI T E D S E CU RI T Y B ANK,

D efe ndant- A ppel l ee. N o. 06- 4014

APP EAL FROM THE BANK RUPTCY APPEL LATE P ANEL

F O R T H E T E N T H C IR C U IT ( B A P N o. U T - 05- 021) J er emyC . Si nk ( St ephen W . R upp, w i t h hi m on t he br i efs ) , M cK ay , B ur t on & T h u rm a n , S a lt L a k e C ity , U tah , fo r A p p e llan t. D on J . Pool , T he Law Fi r m of Pow el l & Pool , Fr es no, C al i forni a, forA ppel l ee. B efor e B RI S CO E , HOLL OW AY , and M c CO NNELL , C i rcui tJudg es.T h a t d e c is io n is re p o rt e d a t 3 3 5 B .R . 1 7 0 . 1 -2- HOLL OW AY , C i r cui tJ udge. T hi s i s an appe al fr om a dec i s i on byt he B ankrupt cyA ppel l at e Panel of the T e n th C ir c u it ( th e B A P ). J u ri s d ic tio n in th is c o u rt is c o n fe rr e d b y2 8 U .S .C . § 1 1 5 8 (d ). I O n e o f th e p u rp o se s o f

b a n k ru p tcy l a w is to p ro v id e fa ir re m e d ies to c re d ito rs g e n e ra lly, a n d a c o ro lla ry o f th is p ri n c ip le is to p re v e n t, w ith in lim its , a debt orfr om gi vi ng pr efe rr ed tr eatm entt o s om e cr edi t or s i n der ogat i on of the in ter e sts o f

o th e r, sim ilarlysitu a ted c re d ito rs. A d e b to r m ig h t b e m o tiv a ted to pr efe rone cr edi t orors om e cr edi t or s overhi s cr edi t or s gener al l yfora number of r eas ons , i ncl udi ng per s onal and bus i nes s connec t i ons . T he s uper vi s i on of the bankrupt cycour tgener al l ypr event s unw arr ant ed pr efe r ent i al t r eatm ent . B utt he l aw has l ong r ecogni zed a nd addr es s ed the conc ern t hata debt orcoul d ci r cumvent t hi s pol i cybym aki ng pr efe r ent i al t r ans fer s befor e fi l i ng hi s bankrupt cypet i t i on. T h e p o w e r a n d d u tyto a d d re ss p re fe re n tial tra n sfe rs in C h a p ter 7 c a se s is i ni t i al l yves t ed i n a trus t ee a ppoi nt ed byt he bankrupt cycour tt o s uper vi s e the bankrupt cyes t at e. A s di s cus s ed i nfr a , the B a n k ru p tcy C o d e p ro v id e s th a t a t r ans fert o anycr edi t orl es s t han 90 day s befor e fi l i ng a bankrupt cypet i t i on can be s etas i de i f i tm eet s ot hers t atut or ycr i t er i a ( i ncl udi ng gener al l yt hatt he-3-

tra n sfe r is m a d e fo r th e b e n e fit o f a c re d ito r o n a c c o u n t o f a p re -e x istin g d e b t, w hi l e the debt orw as i ns ol vent , and r es ul t s i n t he cr edi t orr ece i vi ng m or e than s he w oul d i f the debt or ’ s as s et s w er e l i qui dat ed i n bankrupt cy ) . M or eover , t he l aw re c o g n ize s th a t th e re w ill b e so m e c re d ito rs w h o m a yb e e sp e c iallylik e lyto r ece i ve fa vor abl e tr eatm ent ; undert he C ode, t hes e ar e t er m ed “i ns i der s . ” C ons equent l y , a trus t ee may“avoi d” ( i . e. , nul l i fy ) t r ans fer s t o i ns i der s w hen the o ther c ri teri a a re p rese n t and the d eb tor m ad e the tr an sfe r w ith in o n e y ea r be fo re filin g b a n k ru p tc y . See 1 1 U . S . C . § 5 4 7 (b). C ongr es s has i ncl uded i n t he def i ni t i on of i ns i der s fami l ym ember s and ot her s w i t h cl os e r el at i ons hi ps t o t he debt or , i ncl udi ng corpor at i ons forw hi ch an in d iv id u a l d e b to r se rv e s a s a n o ffice r o r d ire c to r. T h e p rin c ip a l issu e p re se n ted in t hi s appea l i s w hethera “di r ect oremer i tus ” i s a “di r ect or ” w i t hi n t he meani ng of 11 U . S. C . § 547 ( b) of t he B ankrupt cyC ode. T he Trus t ee mai nt ai ns t hatt he B ank i s bot h a pers e i ns i derand an e xt r a- s t atut or yi ns i der . A ppel l ant ’ s B r i ef a t20. II T hi s appea l ar os e fr om a bankrupt cypr ocee di ng fi l ed byM r . R onal d K ent K unz ( t he D ebt or ) . T he B ankrupt cyC our tappoi nt ed M r . St ephen Rupp (the T rus t ee) , appel l anti n t hi s cour t , t o be trus t ee of t he D ebt or ’ s es t at e. T he i s s ue befor e us conce r ns pr e- pet i t i on t r ans fer s fr om t he D ebt ort o A ppel l ee U ni t ed Secur i t yB ank ( U ni t ed) . T he D ebt orhad bee n i nvol ved i n t he i ni t i al or gani zat i on of U ni t ed and ha d been a m ember of U ni t ed’ s boar d of di r ect or s unt i l he r es i gned-4-

fr om t he boar d i n 1990. Si nce r es i gni ng fr om t he boar d, t he D ebt orhas hel d t he t i t l e “di r ect oremer i tus ” buthas notat t ended a nym eet i ngs of the boar d. D ebt or has no deci s i on- m aki ng pow er , no offi ce, and no s t aff; he i s notent i t l ed t o at t end anym eet i ng on U ni t ed’ s bus i nes s . D i r ect or s emer i tus of U ni t ed r ece i ve a f i xed m on t hlyho no rar i um of $ 40 0. 00 and are l i st ed in U nit ed’s annu al report s. D ebt orfi l ed hi s bankrupt cypet i t i on on N ovember 27, 2002. B egi nni ng a b o u t o n e y e a r e a rlier , D e b to r h a d a ttem p ted , thr o u g h c o u n se l, t o n e g o tiate set t l em ents of sub st anti al deb t s he ow ed to U nit ed an d tw o o t her l end ers , C om er i ca Bank and W el l s Far go B ank. D ur i ng t he y earpr i ort o comm ence m ent o f th e b a n k ru p tc ya c tio n , D e b to r m a d e p a ym e n ts to e a c h o f th e s e th re e c re d ito rs . A c c o rd in g to a lleg a tio n s m a d e b yth e T ru ste e , w h ich a re n o t at iss u e in th is a p p e a l, D e b to r’s p ro p e rtytra n sfe rs a n d p a ym e n ts to U n ited w e re p re fe re n tial in t he legal sense of im proving U nit ed’s posi t i on rel at i ve to ot her cr edit ors. C om er i ca Bank and W el l s Far go B ank ea ch fi l ed a pr oof of c l ai m i n t he b a n k ru p tcy co u rt, w h ile U n ited d id n o t. T h e T ru ste e a lleg e s th a t o n e y e a r p rio r to bankrupt cy , D ebt orow ed U ni t ed $611, 537. 69, of w hi ch $494, 000. 00 w as uns ecur ed. O n t he dat e of f i l i ng bankrupt cy , t he Trus t ee a l l eges , t hatdebthad been reduced t o $ 36 7, 43 7. 42 , of w hich only$1 7, 43 7. 42 w as unsecu red. T hese a m o u n ts a re c o n tes ted , b u t th is in ter lo c u to rya p p e a l d o e s n o t re q u ire th is c o u rt to a d d re s s th o s e is s u e s .-5- III D ecision of th e B an kruptcy Cou rt T he Trus t ee br oughtan adve r s arypr ocee di ng t o avoi d and r ecove rt he val ue of tr ans fer s byt he D ebt ort o U ni t ed of tw o par cel s of r eal pr oper t y , 220, 000 s har es of s t ock i n a t el evi s i on company , and $46, 459 i n cas h paym ent s . T he T rus t ee c ont ended thatt he tr ans fer s t o U ni t ed s houl d be r es ci nded undert he r el evantpr ovi s i on of the B ankrupt cyC ode, w hi ch pr ovi des t hatthe trus t ee m ayavoi d anyt r ans ferof an i nt er es tof the debt ori n pr oper t y– (1) to o r fo r th e b en efito f a cre d it o r; (2) fo r or o n ac co u n t of an an tece d en t deb t ow ed b ythe d eb tor b efo re s uch tr ans ferw as m ade; (3 ) m a d e w h ile th e d e b to r w a s in so lv e n t; ( 4) m ade – ( A ) on orw i t hi n 90 day s befor e the dat e of the fi l i ng of t he pet i t i on; or ( B ) betw een ni netyday s and one y earbefor e the dat e of t he fi l i ng of the pet i t i on, i f s uch cr edi t oratt he t i m e of s uch tr ans ferw as an i ns i der ; and ( 5) t hatenabl es s uch cr edi t ort o r ece i ve more t han s uch cr edi t or w oul d r ece i ve i f – ( A ) t he ca s e w er e a c as e underchapt er7 of thi s t i t l e; ( B ) t he tr ans ferhad notbeen made; and ( C ) s uch cr edi t orr ece i ved paym entof s uch debtt o t he ext entpr ovi ded byt he pr ovi s i ons of thi s t i t l e. 1 1 U . S . C . § 5 4 7 (b). T h e tran sfe rs ha d b ee n m ad e less tha n o n e y ea r bu t m o re t han 90 day s befor e D ebt orfi l ed hi s pet i t i on, s o t he Trus t ee ha d t o s how t hatt he tr a n s fe rs w e re to a n “ in s id e r,” th a t is th a t U n ite d w a s a n “ in s id e r” o f th e D e b to r. U n ite d a n d th e T ru s te e e a c h file d m o tio n s fo r p a rt ia l s u m m a ry ju d g m e n t.-6-

T he B ankrupt cyC our tdeni ed U ni t ed’ s m ot i on and gr ant ed the Trus t ee’ s m ot i on, concl udi ng in tera lia : 4. [U ni t ed] i s an i ns i derof the D ebt orpur s uantt o t he pl ai n m eani ng of Sect i on 101( 31) of the U ni t ed St at es B ankrupt cyC ode. 5. Sect i on 101( 31) i ncl udes , as i ns i der s of a de bt or , corpor at i ons for w h ich th e d eb tor i s a d ir ec tor. 6 . [U n ited ] h e ld th e D e b to r o u t to th e p u b lic, to in v e sto rs, a n d to cust om ers as a di rect or em eri tus. 7 . T h e term “e m eritu s” is an adjecti v e. A n adjecti v e is a w o rd bel ongi ng t o one of the maj orfor m cl as s es i n anyof num er ous l anguage s , and typi cal l ys er ves as a modi fi erof a noun t o denot e a q u a lityo f

th e th in g n a m e d , to in d ica te its q u a lityo r e x ten t, or to s peci fya thi ng as di s t i nctfr om s om ethi ng el s e. W ebs t er ' s N ew C o ll eg iat e D ict ion ary(19 7 9 ). 8. T he w or d “di r ect or ” i s a noun us ed i n Sect i on 101( 31) ( A ) ( i v) of the C o d e to d efine w h en a c o rpo rati o n is an inside r. 9. T he w or d “emer i tus ” [i s ] an adj ect i ve thatdoes not hi ng m or e than m o d if yth e n o u n “ d ire c to r.” T h is le a v e s th e D e b to r a s a d ire c to r in th e sa m e se n se th a t a “ se c o n d c las s d ire c to r” o r a “ v o tin g d ire c to r” is a di r ect orof a c orpor at i on. A ccor di ngl y , t he B ankrupt cyC our tgr ant ed the Trus t ee’ s m ot i on forpar t i al su m m a ryju d g m e n t an d d e n ied U n ited ’s m o tio n fo r p a rtial s u m m a ryju d g m e n t. Sum m ar

y of the BA P ’s O

pini on T he B A P gr ant ed l eave forU ni t ed t o pur s ue an i nt er l ocut or yappea l under author i t yof 28 U . S. C . § 158( a) ( 3) and r ever s ed the dec i s i on of the B ankrupt cy C our t . T he B A P not ed thatt he onl yi s s ue befor e i tw as w hetherU ni t ed i s anT he B A P not ed thati s s ues r egar di ng t he D ebt or ’ s i ns ol vencyand the 2 a m o u n t o f

th e tra n sfe rs r e m a in e d fo r tria l in th e b a n k ru p tcy co u rt. -7- inside r of

the D eb tor. 2 T he B A P t hen not ed the s t atut or ydefi ni t i on: “Sect i on 101( 31) pr ovi des t hat‘ t he t er m “i ns i der ” i ncl udes – ( A ) i f the debt ori s an i ndi vi dual – . . . ( i v) [a] corpor at i on of w hi ch the debt ori s a di r ect or , offi cer , orper s on i n contr ol [. ] ’ ” T he B ankrupt cyC our thad es s ent i al l yhel d t hata di r ect oremer i tus i s a di r ect or beca us e “e m er i tus ” i s m er el yan adj ect i ve. T he B A P di s agr eed. For one thi ng, t he B A P sa i d, t he r el i ance on t he def i ni t i on of an a dj ect i ve w as m i s pl ace d. U nder th a t re a so n in g , a “ fo rm e r d ire c to r” w o u ld a lso b e a d ire c to r, b e c a u se “ fo rm e r” is a n a dje c tiv e . T h e B A P then loo k ed at W eb ster’s D ict ion aryan d B lack ’s L aw D ict ion ary fort he def

i ni t i on of “di r ect or . ” U ndert hes e author i t i es , t he t er m i ncl udes an e lem e n t o f

c o n tro l o f

th e c o rp o ra tio n . T h e leg isla tiv e h isto ryo f th e sta tu te r evea l ed i nt entt o us e the t er m cons i s t ent l yw i t h t hatcomm on under s t andi ng, t he B A P f u rth e r o b se rv e d . B u t th e D e b to r, as a d ire c to r e m e ritu s, h a d n o a u th o rityto contr ol U ni t ed t o anyext enton t he fa ct s pr es ent ed. T her efor e, t he B A P concl uded thatt he gr antof part i al s um m aryj udgm ent t o t he Trus t ee w as i m pr operand r ever s ed the B ankrupt cyC our t ’ s deci s i on. T he B A P affi r m ed the B ankrupt cyC our t ’ s deni al of U ni t ed’ s cr os s - m ot i on forpar t i al s um m aryj udgm ent ; no appea l has been t aken f r om t hatrul i ng.-8- IV W e i ndepende nt l yr evi ew t he dec i s i on of the B ankrupt cyC our ther e, not th a t o f th e B A P . A lder et e v. E duc. C r edi tM gm t . C or

p. ( In r e Al der et e) , 412 F. 3d 1 2 0 0 , 1 2 0 4 (1 0 th C ir. 2 0 0 5 ); In r e Al br echt , 2 3 3 F . 3 d 1 2 5 8 , 1 2 6 0 (10 th C ir . 2000) . B eca us e the bas i c i s s ue her e i s one of i nt erpr et at i on of the bankrupt cy s t atut es and ther e ar e no di s put ed i s s ues of fa ct , s ee not e 3, i nfr a , ours t andar d of revi ew i s de novo . Midk iff v . S tew a rt (In re Midk iff ) , 3 4 2 F .3 d 1 1 9 4 , 1 1 9 7 (1 0 th C ir . 2 0 0 3 ). “I ti s a funda m ent al canon of s t atut or ycons t ruct i on t hatt he w or ds of a sta tu te m u st b e re a d in th e ir c o n tex t an d w ith a v iew to th e ir p lac e in th e o v e ra ll s t atut or ys cheme. ” D avis v. Mi chigan D ept. of Treasury , 489 U . S. 803, 809 ( 1989) . “St atut or ycons t ruct i on m us tbegi n w i t h t he l anguage empl oy ed by C ongr es s and the as s um pt i on t hatt he or di narym eani ng of thatl anguage acc ur at el yexpr es s es t he l egi s l at i ve purpos e. ” P ar k ‘N F l y, Inc. v. D ol l arP ar k & F l y, Inc. , 4 6 9 U . S . 1 8 9 , 1 9 4 (19 8 5 ). W hen the t er m “di r ect or ” i s us ed i n r efe r ence t o a corpor at i on, as i ti s us ed i n the st atutorydefini t i on of “insi der, ” t he term plai nlym eans a p ers on w ho i s a m e m b e r o f

th e g o v e rn in g b o a rd o f th e c o rp o ra tio n a n d p a rticip a tes in c o rp o ra te g o v e rn a n c e . See W eb ster’s T h ir d N ew Intern at’l D ict ion ary6 4 1 (19 9 3 ); B lack ’s L aw D ict ion ary4 7 2 -73 (7th ed . 1 9 9 9 ). W h e n w e tu rn to th e m e a n in g o f “ d ire c to r e m e ritu s,” h o w e v e r, w e tak e n o te-9-

of the comm on under s t andi ng of the t er m “emer i tus ” butl ook m or e cl os el yt o t he p a rticu lar m e a n in g o f th e ter m a s u se d b yth e p a rties in th e c a se , es p e c ially U ni t ed, w hi ch conferr ed the t i t l e. “Em er i tus ” i s defi ned as : “1. hol di ng aft er re tirem e n t (a s f

ro m p ro fe ss io n a l o r a c a d e m ic o ffice ) a n h o n o ra rytit le corr es pondi ng t o t hathel d l as tdur i ng act i ve s er vi ce; 2. r et i r ed fr om an off i ce or pr ofes s i on . . . . ” W ebs t er ’ s T hi r d N ew I nt ernat ’ l D i ct i onary741. L ooki ng att he undi s put ed fa ct s of thi s cas e, t he t er m s eems t o have be en us ed byU ni t ed i n a w aycons i s t entw i t h t he comm on under s t andi ng. T hati s , D ebt or , as a di r ect or em eritu s, h eld a n h o n o raryti tl e a fter reti rem en t from ac ti v e se rvice o n U n it ed ’s boar d. A s not ed pr evi ous l y , he had notat t ended a nyboar d m eet i ngs and w as not e n tit led to a tten d a n ym e e tin g o n U n ited ’s b u sin e ss , an d h e h a d n o v o tin g rig h ts orot herauthor i t y . W e conc l ude thatt he undi s put ed fa ct s es t abl i s h t hatt he D ebt orw as nota di r ect ori n t he or di naryunder s t andi ng of the t er m . H i s pos i t i on w a s in s te a d c lo s e r t o th a t o f “ h o n o ra ry d ir e c to r” o r “ re tir e d d ir e c to r.” T hi s appea r s t o be an i s s ue of f i r s ti m pr es s i on. W e fi nd s om e s uppor tfor ourhol di ng – w hi ch w e thi nk i s s t r ai ght forw ar d – fr om anal ogous rul i ngs of other cour t s . D eal i ng w i t h t he s ame ques t i on of w hethera per s on w as an i ns i derof t he debt or , one courthas hel d t hata form ers pous e i s nota r el at i ve of the debt or( and s o notan i ns i derpers e) w i t hi n t he meani ng of the B ankrupt cyC ode, al t hough a s p o u s e c le a rl yis a re la tiv e a n d th u s a n in s id e r. Mi l l er v. Sch um an ( In re Schum an) , 8 1 B .R . 5 8 3 , 5 8 5 -8 6 (B .A .P . 9 th C ir. 1 9 8 7 ). In a c o n sid e ra b ly-10-

d iffe re n t co n tex t, i t w a s h e ld th a t an “ h o n o ra ryc o n su l” is n o t a “ c o n su l” w ith in th e m e a n in g o f

2 8 U .S .C . § 1 3 5 1 (1 ). Foxgor d v. His chem oel l er , 820 F. 2d 1030 (9th C ir . 1 9 8 7 ). T he T rust ee argues t hat the co nst ruct i on w e ado pt as t he co m m on sense m e a n in g o f

th e ter m a c tu a llyd isto rts th e m e a n in g b ya d d in g a q u a lific a tio n th a t is n o t p re se n t in th e sta tu te. T h e T ru ste e a rg u e s th a t th e ter m m u st b e c o n stru e d to in c lu d e a n yk in d o f

d ire c to r, n o m a tter w h a t adjec tiv e m ig h t b e e m p lo y e d in conj unct i on w i t h t he t er m . W e di s agr ee a nd concl ude thats uch a gl obal cons t ruct i on of the t er m w oul d defycomm ons ens e, frus t r at e l egi s l at i ve i nt ent , and di s t or tt he or di narym eani ng of t he t er m . U ndert he Trus t ee’ s vi ew , a “for m er d ir ec tor” w o u ld b e n o d iffe ren t from a “ m an ag ing d ir ec tor, ” b ec au se m ere a dje c tiv e s s h o u ld n o t b e a llo w e d to n a rr o w th e s c o p e o f th e n o u n th a t is m o d ifie d . B u t th is a rg u m e n t is q u ite in c o n sis ten t w ith c o m m o n u n d e rsta n d in g s a n d w o u ld l ead to absurd resul t s. A s t ep bac k t o exami ne the s t atut or ycont extof the i s s ue s how s t hatour ho l ding i s consi st ent w i t h the l egis l at i ve int ent. T o d em on strat e t his , w e fi rs t q u o t e t h e p r o v i s i o n m o r e c o m p l e t e l y: T h e term “ins ider” i ncl udes – ( A ) i f the debt ori s an i ndi vi dual – (I) relati v e o f th e d eb tor o r of a g en era l partne r of

the d eb tor; (i i) p artne rship in w h ich th e d eb tor i s a g en era l partne r; ( i i i ) gener al par t nerof the debt or ; or ( i v) corpor at i on of w hi ch the debt ori s a di r ect or , offi cer , or-11- p e rs o n in c o n tr o l . . . . 1 1 U . S . C . § 1 0 1 (31 )(A ) (em p h asis ad d ed ). C our t s have he l d t hatt he us e of the w or d “i ncl udes ” i n t hi s s ect i on in d ic a te s th a t C o n g re s s d id n o t in te n d fo r t h e c a te g o ri e s lis te d to b e e x c lu s iv e . I ns t ead, t he ca t egor i es ar e “i l l us t r at i ve r athert han exha us t i ve. ” In r e Kr ehl , 86 F. 3d 737, 741 ( 7t h C i r . 1996) . C ons equent l y , t he author i t i es ar e i n agr eementt hat t her e ar e tw o d istin c t typ e s o f

in sid e rs, [ first] th o se e n tit ies sp e c ifica lly m e n tio n e d in th e s ta tu te (“ re la tiv e ,” “ p a rt n e rs h ip ,” “ g e n e ra l p a rt n e r,” a n d “ c o rp o ra tio n ” ), i . e. p e r se in sid e rs, o r [ se c o n d ] th o se n o t li ste d in t he st atutorydefini t i on , bu tw ho hav e a “suffici entl ycl ose re latio n sh ip w ith th e d e b to r th a t . . . co n d u c t is m a d e su bjec t to c lo s e r s c ru tin yth a n th o s e d e a lin g a t a rm ’s le n g th w ith th e d e b to r.” Mi l l er A venu e P rof

essi on al & P rom oti on al Serv. v. B rady ( In re En t erprise A cqu isi t i on P artners) , 319 B . R . 626, 631 ( B . A . P. 9t h C i r . 2004) ( quot i ng Wi ls on v. Huf f m an , 7 1 2 F . 2 d 2 0 6 , 2 1 0 (5th C ir . 1 9 8 3 )). E ach o f t he tw o categori es of i nsi ders “i s bas ed on ei t herone of tw o r el at i onal cl as s i fi cat i ons . Fi r s t , t he C ode as s i gns i ns i ders t atus t o ent i t i es orr el at i ves of the debt or , orof p e rs o n s in c o n tr o l o f

a re la te d e n tity, w h o se a ffi n ity o r c o n sa n g u in ity g ive s r ise to a c o n c lu siv e p re su mp tio n th a t th e in d ivid u a l o r e n tit y com m an ds pref

erent i al treatm ent by the d ebtor. Second, i ns i der sta tu s m a yb e b a se d o n a p ro fe ss io n a l o r b u sin e ss re latio n sh ip w ith t he d ebtor , i n ad dit i on t o the C od e’s per se c la s s ific a tio n s , w here su c h re la tio n sh ip c o mp e ls th e c o n c lu sio n th a t th e in d ivid u a l o r e n tit y has a r elat i ons hi

p w i th the debtor, cl os e enough to gai n an advantage at tr i but abl e s i mpl y t o af f i ni t y r atherthan t o the cours e of dea l i ngs betw een the pa rt i es. ”-12-

In re En t erprise , 319 B . R . at631 ( quot i ng Fri edm an v. Sh ei l a P l ots ky B rokers, Inc. ( In r e Fri edm an) , 1 2 6 B . R . 6 3 , 6 9 (B . A . P . 9 th C ir . 1 9 9 1 )). T hus , forexampl e, a gene r al par t nerora r el at i ve i s an i ns i derpers e, w ith o u t n e e d fo r sh o w in g th e sp e c ific n a tu re o f th e re latio n sh ip w ith th e d e b to r in a part i cul arcas e. A per s on orent i t ynotm ade a n i ns i derpers e ca n s t i l l be t r eat ed as an i ns i deron a s how i ng t hatt he per s on orent i t yi n fac thad a r el at i ons hi p w i t h t he debt ort hatw as s uffi ci ent l ycl os e thatt he tw o w er e not deal i ng atar m ’ s l ength. T hus , i n Kr ehl , t he courthel d t hatt he form erpr es i dent o f a c o m p a n yh a d b e e n a n in sid e r so lelyb yv irtu e o f o ffice p rio r to h is r es i gnat i on. A ft erhi s r es i gnat i on, he cont i nued t o be an i ns i der– notbeca us e he w a s “ p re sid e n t em e ritu s” o r “ fo rm e r p re sid e n t,” a s th e T ru ste e in th is c a se w o u ld appar ent l yar gue – butbeca us e on the evi dence he r emai ned i n contr ol of the c o m p a n y. W e conc l ude thati tw as t he l egi s l at i ve i nt entt hata per s on w i t h a r el at i ons hi p des i gnat ed i n t he s t atut e be tr eat ed as an i ns i derbeca us e of the hi gh pot ent i al forcontr ol i nher enti n t hos e r el at i ons hi ps , and thatot herper s ons m aybe found t o be i ns i der s i n par t i cul arcas es , bas ed on the s peci fi c fa ct s . W e conc l ude t hati ti s m or e cons i s t entw i t h t hi s over al l under s t andi ng of the func t i on of the sta tu to ryd e fin iti o n o f “ in sid e r” – a s w e ll as tru e to th e a c tu a l lan g u a g e – to h o ld her e thatD ebt or , a “di r ect oremer i tus , ” w as nota “di r ect or ” w i t hi n t he meani ng of the def

i ni t i on.T hi s i s nott o s ayt hatt he part i al s um m aryj udgm entent er ed byt he 3 B a n k ru p tcy C o u rt w a s in e rro r d u e to th e p re se n c e o f q u e stio n s o f

fa c t. A t th is ju n c tu re , d e ter m in in g w h e th e r U n ited w a s a n “ in sid e r” o f th e se c o n d typ e d u e to i t s r el at i ons hi p w i t h K unz – a que s t i on w e do notr eac h – i s l eftfort he B ankrupt cyC our tt o det er m i ne on r emand. -13- O uranal y s i s does notfor ecl os e the pos s i bi l i t yt hatU ni t ed mays t i l l be found t o be an i ns i derof the D ebt or . L i ke the B A P, w e fi nd t hatt he det er m i nat i on w hetherU ni t ed i s an i ns i derof the s econd type r equi r es t he w e ig h in g o f

e v id e n c e a n d so c a n n o t p ro p e rlyb e m a d e o n su m m a ryju d g m e n t. 3 W e a c c o rd in g lye x p re ss n o o p in io n o n th is p o in t. Conclusion W e hol d t hatD ebt or ’ s t i t l e of “ di r ect oremer i tus ” of U ni t ed does notm ake U ni t ed a “ pers e i ns i der ” of the D ebt or , t hati s an i ns i deras a mat t erof l aw bas ed o n lyo n th e p o sitio n th e D e b to r h e ld . W h e th e r U n ited is u lti m a telyd e ter m in e d to be an i ns i der , bas ed on the s peci fi cs of thei rdeal i ngs , i s l eftt o t he B ankrupt cy C o u rtto d eterm ine o n rem an d . T h e B an k rup tcyC o u rt ’s gra n t of the T rustee ’s m o tio n fo r p a rtial s u m m a ryju d g m e n t is a c c o rd in g ly

R E V E R SE D . T he ca us e i s R E M A N D E D t o t he B ankrupt cyC our tfor fur t herpr ocee di ngs i n acc or d w i t h t hi s opi ni on.