UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: JOHN GEORGE BROUMAS;

In Re: RUTH D. BROUMAS,

Debtors.

JAMES P. KOCH, Trustee,

Plaintiff-Appellee, No. 97-1182

v.

L. LAWTON ROGERS, III, d/b/a

Rogers Investments; ROGERS &

KILLEEN,

Defendants-Appellants.

In Re: JOHN GEORGE BROUMAS;

In Re: RUTH D. BROUMAS,

Debtors.

JAMES P. KOCH, Trustee,

Plaintiff-Appellant, No. 97-1183

v.

L. LAWTON ROGERS, III, d/b/a

Rogers Investments; ROGERS &

KILLEEN,

Defendants-Appellees.

Appeals from the United States District Court

for the District of Maryland, at Greenbelt.

Peter J. Messitte, District Judge.

(CA-95-2429-PJM, BK-91-40752, AP-93-23)
Argued: October 30, 1997

Decided: February 24, 1998

Before MURNAGHAN, HAMILTON, and LUTTIG,

Circuit Judges.

_________________________________________________________________

Affirmed in part and reversed in part by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Howard I. Rubin, GOLD & STANLEY, P.C., Alexandria, Virginia, for Appellants. James P. Koch, Baltimore, Maryland,

for Appellee. ON BRIEF: Raymond R. Pring, Jr., GOLD & STANLEY, P.C., Alexandria, Virginia, for Appellants.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

This is an appeal from the United States District Court for the District of Maryland sitting as an appellate court in bankruptcy. For reasons that follow, we affirm in part and reverse in part.

I.

John Broumas (Broumas) and his wife, Ruth Broumas (collectively

the Debtors), filed a voluntary petition under Chapter 7 of the Bank-

 2
ruptcy Reform Act of 1978, 11 U.S.C. §§ 701-66, on February 15,

1991, in the United States District Court for the District of Maryland.

At the time, Broumas was a banker with Madison National Bank of

Virginia and a substantial shareholder in its parent company, James

Madison, Limited.

James Koch was appointed as Chapter 7 Trustee of the Debtors'

bankruptcy estate. In this position, Koch (the Trustee) initiated this

adversary proceeding against L. Lawton Rogers (Rogers) and the law

firm of which he was a partner, Rogers & Killeen (the Law Firm),

(collectively the Defendants), to avoid and recover allegedly preferential or fraudulent transfers or both by the Debtors under Bankruptcy

Code §§ 547(b) and 548(a). See 11 U.S.C. §§ 547(b) and 548.

Rogers and Broumas had a multifaceted relationship spanning fifteen years. For example, Rogers was Broumas' lawyer, and Broumas

was Rogers' banker. The two were also friends and participated in

several financial investments. The relationship between Rogers and

Broumas was so close that Rogers allowed Broumas unlimited access

to his accounts at Madison National Bank of Virginia as well as the

Law Firm's account by giving Broumas signature authority over the

accounts. Furthermore, over the years, Rogers and Broumas made

loans to each other and pledged each other's credit.

The two ultimately participated in a wash-trade scheme to artificially inflate the price of James Madison, Ltd. stock, whereby Rogers

placed orders to buy and sell the stock at Broumas' request. This

scheme became the subject of an investigation by the United States

Securities and Exchange Commission resulting in an injunction

against Broumas barring him from purchasing or selling stock without

a beneficial change in ownership. No charges were brought against

Rogers.

Counts I and II of the Trustee's first amended complaint involved

the Debtors' granting of two deeds of trust on their residence in favor

of the Law Firm. The Debtors granted one to secure payment of a

$50,000 flat fee they owed the Law Firm for legal representation in

certain litigation known as the "Tantallon Litigation" (the $50,000

Deed of Trust). The Debtors granted the other to secure repayment of

a $25,000 loan the Law Firm had made in favor of the Debtors (the

 3
$25,000 Deed of Trust). When the Debtors transferred the $50,000

Deed of Trust and the $25,000 Deed of Trust (collectively the Deeds

of Trust) to the Law Firm, there was sufficient equity in the residence

to support them, even though the residence was encumbered by a first

and a second deed of trust. In July 1991, however, when the holder

of the first deed of trust initiated a foreclosure sale upon the residence, insufficient equity existed in the residence to support any

recovery under the Deeds of Trust. In Count I of the first amended

complaint, the Trustee alleged that the grants were avoidable and

recoverable as preferential transfers under Bankruptcy Code § 547(b).

The Trustee alternatively alleged in Count II that the grants were

avoidable and recoverable as fraudulent transfers under Bankruptcy

Code § 548(a). Both the Law Firm and Rogers were named as defendants in Counts I and II.

Counts III and IV named only Rogers as a defendant and involved

three parcels of land located in Ocala, Florida. On August 15, 1990

Broumas deeded two of the three parcels to Rogers. Broumas did not

own the third parcel outright, but held a first mortgage on it, which

he assigned to Rogers prior to September 14, 1990. Rogers acquired

title to the third parcel in a foreclosure sale and sold all three parcels

for a total of $115,000. Count III alleged that the transfers were

avoidable and recoverable as preferential transfers under Bankruptcy

Code § 547(b), and Count IV alleged that they were avoidable and

recoverable as fraudulent transfers under Bankruptcy Code § 548(a).

Counts V and VI named both the Law Firm and Rogers as defendants and involved certain cash transfers stemming from the washtrade scheme between Rogers and Broumas to artificially inflate the

value of stock in James Madison, Limited. Count V sought to avoid

and recover the transfers under Bankruptcy Code§ 547(b), and Count

VI sought to avoid and recover the transfers under Bankruptcy Code

§ 548(a).

The bankruptcy court conducted a bench trial on all of the claims.

With respect to the Law Firm, the bankruptcy court only found it liable on Count II. On that count, the bankruptcy court held that the

Debtors' grant of the $50,000 Deed of Trust was a fraudulent transfer

within the meaning of Bankruptcy Code § 548 and ordered the Law

Firm to pay the Trustee $50,000. The bankruptcy court only found

 4
Rogers liable on Count III, and alternatively, on Count IV. The bankruptcy court ordered Rogers to pay the Trustee $115,000 under one

count or the other.

All parties noted timely appeals to the United States District Court

for the District of Maryland. On appeal before the district court, the

Trustee only challenged the bankruptcy court's rulings in favor of the

Defendants on Counts I and VI. The Law Firm challenged the bankruptcy court's ruling in favor of the Trustee on Count II, and Rogers

challenged the bankruptcy court's rulings in favor of the Trustee on

Counts III and IV.

The district court reversed the bankruptcy court's finding of no liability on Count I and ordered the Defendants jointly and severally liable for $75,000. The district court affirmed the bankruptcy court's

finding of liability against the Law Firm on Count II, but also

assessed liability against Rogers.1 The district court affirmed the

bankruptcy court's alternative findings of liability against Rogers on

Counts III and IV, but also assessed the same liability against the Law

Firm.2 Finally, the district court affirmed the bankruptcy court's finding of no liability on Count VI with respect to Rogers and the Law

Firm.

All parties noted timely appeals of the district court's final order

to this court. On appeal before us, Rogers and the Law Firm appeal

the district court's adverse rulings on Counts I through IV. In his

cross-appeal, the Trustee appeals the district court's affirmance of the

bankruptcy court's finding of no liability against the Defendants on

Count VI.

II.

We apply the same standard of review as the district court applied

to the bankruptcy court's decision. Findings of fact are reviewed for

clear error, and conclusions of law are reviewed de novo. See In re

_________________________________________________________________

1 The Trustee did not appeal the bankruptcy court's finding of no liability on Count II with respect to Rogers.

2 The Law Firm was not even named as a party in Counts III and IV.

 5
Johnson, 960 F.2d 396, 399 (4th Cir. 1992). We will address the challenged claims in the order in which they appear in the complaint.

III.

Under the current Bankruptcy Code, a bankruptcy trustee has "extensive power to avoid certain pre-petition transactions which

adversely affect the bankruptcy estate." In re Virginia-Carolina Fin.

Corp., 954 F.2d 193, 196 (4th Cir. 1992) (citing 11 U.S.C.

§§ 544-551, 553 (1988)). We have characterized a bankruptcy trustee's power to avoid a pre-petition transfer meeting the requirements

of Bankruptcy Code § 547(b) as one of "the more important of these

voidable transfer[ ]" powers. Id. In general, Bankruptcy Code

§ 547(b) gives a bankruptcy trustee the power to avoid "a transfer

made within a limited time prior to the filing of a bankruptcy petition

that enables a creditor to receive more than the creditor would otherwise receive if, instead, the creditor were limited to his or her share

of a distribution resulting from a Chapter 7 liquidation." Id. Specifically, Bankruptcy Code § 547(b) provides:

. . . the trustee may avoid any transfer of an interest of the

debtor in property --

(1) to or for the benefit of a creditor;

(2) for or on account of an antecedent debt owed

by the debtor before such transfer was made;

(3) made while the debtor was insolvent;

(4) made --

 (A) on or within 90 days before the date of the

filing of the petition; or

 (B) between ninety days and one year before

the date of the filing of the petition, if such creditor at the time of such transfer was an insider;

and

 6
(5) that enables such creditor to receive more than

such creditor would receive if --

 (A) the case were a case under Chapter 7 of this

title;

 (B) the transfer had not been made; and

 (C) such creditor received payment of such debt

to the extent provided by the provisions of this

title.

11 U.S.C. § 547(b). Bankruptcy Code § 547(g) places the burden of

proving the avoidability of a transfer under Bankruptcy Code § 547(b)

on the trustee. See 11 U.S.C. § 547(g).

In Count I, the Trustee sought to avoid and recover from the

Defendants the Debtors' transfers of the Deeds of Trust on their residence under Bankruptcy Code § 547(b). In defending against liability

on Count I before the bankruptcy court, the Defendants primarily

challenged the Trustee's ability to satisfy subsection (b)(5) of Bankruptcy Code § 547. According to the Defendants, subsection (b)(5)

was not satisfied, because they did not receive more as a result of the

transfers than if they had waited for liquidation and distribution of the

assets of the bankruptcy estate. The bankruptcy court agreed with the

Defendants, concluding that although sufficient equity in the residence existed to support the Deeds of Trust at the time of their transfer, subsection (b)(5) was not satisfied because the Defendants

received no more as a result of the transfers than they would have

received as creditors against the bankruptcy estate had the transfers

not occurred.

On appeal to the district court, the Trustee contended that reversal

was in order because the Defendants received value at the time of the

transfers regardless of whether the Deeds of Trust had value at the

time of liquidation and distribution. The district court agreed and

reversed, stating that "the [D]efendants received $75,000 in value as

of then regardless of what might have come later." (J.A. 124).

 7
We agree with the Defendants and the bankruptcy court that the

Trustee's proof failed to satisfy subsection (b)(5) of Bankruptcy Code

§ 547. As we recently stated in Hagar v. Gibson, 109 F.3d 201 (4th

Cir. 1997), Bankruptcy Code § 547(b)(5) protects creditors in receipt

of a pre-petition transfer "who can establish that they received no

more by the payment than they would have received as claimants in

a Chapter 7 liquidation." Id. at 210. This effect, we said, "simply carries out `the common sense notion that a creditor need not return a

sum received from the debtor prior to bankruptcy if the creditor is no

better off vis-a-vis the other creditors of the bankruptcy estate than he

or she would have been had the creditor waited for liquidation and

distribution of the assets of the estate.'" Id. (quoting In re VirginiaCarolina Fin. Corp., 954 F.2d at 199).

Here, the undisputed evidence establishes that the Defendants are

no better off vis-a-vis the other creditors of the Debtors' estate than

they would have been had they not received the transfers of the Deeds

of Trust and waited for liquidation and distribution of the assets of the

Debtors' estate. First, the undisputed evidence establishes that the

Deeds of Trust only served to secure payment of certain debt. Thus,

the Deeds of Trust cannot be characterized as payment of debt, as the

Trustee's position seems to suggest. Second, the Deeds of Trust were

never used to satisfy any of the debt. Third and finally, just months

after the Debtors filed their Chapter 7 petition and prior to liquidation

and distribution of their assets, the undisputed evidence establishes

that the Deeds of Trust were completely and permanently worthless;

thus, they could not be used to improve the Defendants' position

among the creditors of the Debtors' bankruptcy estate. See 11 U.S.C.

§ 506(a) ("An allowed claim of a creditor secured by a lien on property in which the estate has an interest . . . is a secured claim to the

extent of the value of such creditor's interest in the estate's interest

in such property . . . and an unsecured claim to the extent that the

value of such creditor's interest . . . is less than the amount of such

allowed claim."). For these reasons, we reverse the district court's ruling on this claim.3

_________________________________________________________________

3 In a late attempt to bolster his position, the Trustee contended at oral

argument that Bankruptcy Code § 550(a) dictates that under Bankruptcy

Code § 547(b) he was entitled to recover an amount equal to the amount

 8
IV.

Next, Rogers challenges the district court's sua sponte assessment

of liability against him on Count II. According to Rogers, the district

court erred in assessing liability against him on Count II, because the

Trustee did not appeal the bankruptcy court's entry of judgment in his

favor on that count. We agree with Rogers. Because the Trustee did

not appeal the bankruptcy court's adverse ruling on that count, the

issue of whether the bankruptcy court erred in making the ruling was

not before the district court. Accordingly, we reverse the district

court's assessment of liability on Count II against Rogers.

V.

The Law Firm next challenges the district court's affirmance of the

bankruptcy court's entry of judgment in favor of the Trustee on Count

II. Count II alleged in relevant part that under Bankruptcy Code

§ 548(a) the Debtors' transfer of the $50,000 Deed of Trust was

avoidable and recoverable as a fraudulent transfer, because it occurred

within one year before the filing of the bankruptcy petition, the Debtors received less than a reasonably equivalent value in exchange for

the transfer, and the Debtors were insolvent at the time of the transfer.

Bankruptcy Code § 548(a) provides, in relevant part:

[a] trustee may avoid any transfer of an interest of the debtor

in property . . . that was made or incurred on or within one

year before the date of the filing of the petition, if the debtor

voluntarily or involuntarily-- . . .

_________________________________________________________________

of equity that supported the Deeds of Trust at the times of their respective transfers. The Trustee's contention is readily rejected, because Bankruptcy Code § 550, entitled "Liability of transferee of avoided transfer,"

does not apply until a transfer has been determined to be avoidable. See

11 U.S.C. § 550(a) (providing that "to the extent that a transfer is

avoided under section 544, 545, 547, 548, 549, 553(b), or 724(a) of this

title, the trustee may recover, for the benefit of the bankruptcy estate, the

property transferred, or, if the court so orders, the value of such property").

 9
(1) made such transfer . . . with actual intent to

hinder, delay, or defraud any entity to which the

debtor was or became, on or after the date that

such transfer was made . . . , indebted; or

(2)(A) received less than a reasonably equivalent

value in exchange for such transfer . . .; and

(B)(i) was insolvent on the date that such transfer was made. . . .

11 U.S.C. § 548(a). This is the fraudulent transfer provision of the

Bankruptcy Code. It allows the trustee to avoid the transfer of a bankruptcy debtor's property made within the year preceding the filing of

the debtor's bankruptcy petition that depletes the assets of the debtor's bankruptcy estate. "The statute recognizes as fraudulent those

transfers made with actual intent to hinder, delay or defraud creditors,

as well as those that are deemed to be constructively fraudulent,

because they are made for less than reasonably equivalent value,

when the debtor is, or is rendered, insolvent, undercapitalized, or

unable to pay its debts as they become due." 5 Collier On Bankruptcy

¶ 548.01[1] (15th ed. 1997). There are two main differences between

Bankruptcy Code §§ 547(b) and 548(a). First, Bankruptcy Code

§ 547(b) requires that the transfer sought to be avoided have been

made to or for the benefit of a creditor for or on account of an antecedent debt. See 11 U.S.C. § 547(b)(1) & (2). In contrast, Bankruptcy

Code § 548(a) has no such requirement. Second, Bankruptcy Code

§ 548(a) requires an element of fraud or constructive fraud, see 11

U.S.C. § 548(a)(1) & (2), where, in contrast, Bankruptcy Code

§ 547(b) does not.

Because the Law Firm does not contest that the Debtors were insolvent during the one year prior to the bankruptcy and that the Debtors

transferred the $50,000 Deed of Trust within the year preceding the

filing of the petition, the issue is whether reasonably equivalent value

was given in exchange for the transfer. As previously stated, the

$50,000 Deed of Trust was intended to secure a $50,000 antecedent

debt for legal representation. After reviewing the evidence in the

record on this issue, we cannot say the district court's finding that the

 10
Debtors received less than reasonably equivalent value in exchange

for the transfer is clearly erroneous.

The Law Firm also contends that if the transfer is avoidable under

Bankruptcy Code § 548(a), the Trustee should only be allowed to

recover the $50,000 Deed of Trust itself, rather than its value at the

time of the transfer. We agree. Once a transfer has been determined

to be avoidable under Bankruptcy Code § 548, Bankruptcy Code

§ 550(a) provides that to the extent the transfer is avoided, "the trustee

may recover, for the benefit of the estate, the property transferred, or

if the court so orders, the value of such property . . . ." 11 U.S.C.

§ 550(a). Significantly, Bankruptcy Code § 550 does not state at what

time this value is to be determined or under what circumstances the

court should order recovery of the value rather than the property

itself. We agree with the Bankruptcy Court for the Western District

of North Carolina, however, that the language of Bankruptcy Code

§ 550(a) evidences "a congressional intent to return the property

transferred unless to do so would be inequitable." In re Morris Communications NC, Inc., 75 B.R. 619, 629 (Bankr. W.D.N.C. 1987),

rev'd on other grounds, 914 F.2d 458 (4th Cir. 1990).

Here, it would not be inequitable to only allow the return of the

$50,000 Deed of Trust, rather than its value at the time of the transfer.

Indeed, to allow the Trustee to recover the value at the time of transfer would mean a windfall to the bankruptcy estate. The record is

undisputed that the Law Firm never invoked its rights under the

$50,000 Deed of Trust to any equity in the Debtors' residence. In

other words, the Law Firm was never enriched by the $50,000 Deed

of Trust. Rather, it merely held a contingent interest in the equity of

the residence from which it never benefited. Furthermore, if the transfer had never occurred, the creditors of the Debtors' bankruptcy estate

would be no worse off because the $50,000 Deed of Trust became

permanently valueless prior to liquidation and distribution through no

fault of the Law Firm. In short, awarding the Trustee $50,000 on this

count unjustly enriches the bankruptcy estate. Such unjust enrichment

cuts against the common sense notion that a creditor need not return

a sum received from the debtor prior to bankruptcy if the creditor is

no better off vis-a-vis the other creditors of the bankruptcy estate than

it would have been had the creditor waited for liquidation and distribution of the assets of the estate. Accordingly, we affirm the avoida-

 11
bility of the Debtors' transfer of the $50,000 Deed of Trust, but

reverse the district court's affirmance of the bankruptcy court's award

of $50,000 in favor of the Trustee on this count and order that the

Trustee's recovery is limited to the $50,000 Deed of Trust itself.

VI.

We next turn to the Law Firm's challenge to the district court's sua

sponte assessment of liability against it on Counts III and IV involving the parcels of land located in Ocala, Florida. This challenge need

not detain us long, because the Trustee has conceded that the district

court erred in assessing liability against the Law Firm on Counts III

and IV. Indeed, the Law Firm was not even named in Counts III and

IV. We, accordingly, reverse the district court's assessment of liability against the Law Firm on Counts III and IV.

VII.

We next consider Rogers' challenge to the district court's affirmance of the bankruptcy court's entry of judgment in favor of the

Trustee on Count III. In Count III, the Trustee sought to avoid the

Debtors' transfers of three parcels of land located in Ocala, Florida

as preferential transfers under Bankruptcy Code§ 547(b). The Trustee

alleged that the transfers were avoidable as preferential transfers

because they were made for the benefit of a creditor; they were made

on account of an antecedent debt owed by the Debtors before such

transfer; they were made while the Debtors were insolvent between

ninety days and one year before the date of the filing of the bankruptcy petition; they were made to a creditor who was an "insider" at

the time of the transfers; and they enabled the creditor to receive more

than he would have received as a creditor in bankruptcy. After sifting

through the evidence, making credibility determinations, and making

findings of fact, the bankruptcy court entered judgment in favor of the

Trustee in the amount of $115,000. The $115,000 represented the

combined value of the three parcels of land at issue.

Rogers first argues that judgment against him cannot be sustained

because the bankruptcy court's finding under subsection (b)(4) of

Bankruptcy Code § 547 that he was an "insider" at the time of the

transfers is clearly erroneous. Rogers further argues that the bank-

 12
ruptcy court's finding under subsection (b)(4) that a particular one of

the three parcels was transferred between ninety days and one year

before the Debtors filed their petition is clearly erroneous. Finally,

Rogers argues that the bankruptcy court's finding that the transfers

were on account of an antecedent debt was clearly erroneous. We

address each of these arguments in turn.

A.

The bankruptcy court found that Rogers was an "insider" within the

meaning of subsection (b)(4)(B) of Bankruptcy Code§ 547. Bankruptcy Code § 101(31) provides the following non-exhaustive list of

the individuals who are "insiders" for purposes of the Bankruptcy

Code, see Butler v. David Shaw, Inc., 72 F.3d 437, 443 (4th Cir.

1996):

(i) relative of the debtor or of a general partner of the

debtor;

(ii) partnership in which the debtor is a general partner;

(iii) general partner of the debtor; or

(iv) a corporation of which the debtor is a director, officer

or person in control.

11 U.S.C. § 101(31)(A).

The fact that Rogers does not fall into any of these categories is of

no moment because, as just stated, this is a non-exhaustive list.

Indeed, "`an insider may be any person or entity whose relationship

with the debtor is sufficiently close so as to subject the relationship

to careful scrutiny.'" Butler v. David Shaw, Inc., 72 F.3d 437, 443

(4th Cir. 1996) (quoting Hunter v. Babcock, 70 B.R. 662, 666 (Bankr.

N.D. Ohio 1986)). Accordingly, insider status is determined by a factual inquiry into the debtor's relationship with the alleged insider. See,

e.g., Browning Interests v. Allison, 955 F.2d 1008, 1011 (5th Cir.

1992).

 13
The evidence in this case fully supports the bankruptcy court's

finding that Rogers was an insider with respect to Broumas. In other

words, the evidence establishes that Rogers and Broumas had a sufficiently close relationship to subject it to careful scrutiny. At various

times over a period of fifteen years Rogers and Broumas have been

creditor and debtor, principal and agent, joint venturers, attorney and

client, landlord and tenant, and close friends. Furthermore, Broumas

and Rogers made numerous loans to each other not evidenced by

written promises to pay and pledged each other's credit. Additionally,

Rogers permitted Broumas to make withdrawals from Rogers' and the

Law Firm's bank account as if it were his own by giving him signature authority; the two were involved in investment deals without

written agreements; Rogers agreed to represent Broumas in litigation

without a written fee agreement; and the two made numerous purchases of bank stock in furtherance of the wash-trade scheme. In light

of this evidence, we cannot say that the bankruptcy court's finding

that Rogers was an insider is clearly erroneous.

B.

We now consider Rogers' argument that the bankruptcy court's

finding under subsection (b)(4) that a particular one of the three parcels was transferred between ninety days and one year before the

Debtors filed their petition is clearly erroneous. The parcel at issue

was not owned by Broumas, but was subject to a first mortgage in his

favor. At some point prior to September 1990, the United States Marshal for the Middle District of Florida seized this parcel for reasons

not apparent from the record. On September 14, 1990, the Marshal

conveyed the property to Rogers by quitclaim deed. The quitclaim

deed stated that Rogers held a purchase money mortgage in the parcel

that had been assigned to him by Broumas.

Rogers argues that although the quitclaim deed evidences Broumas' assignment of the mortgage to Rogers, the bankruptcy court's

finding that the assignment occurred within one year of the filing of

the petition is clearly erroneous, because the quitclaim deed did not

specify when the assignment occurred. We reject Rogers' argument,

because the record contains sufficient evidence to support the bankruptcy court's finding. Ironically, the sufficient evidence comes from

Rogers himself:

 14
Q. I believe your testimony was yesterday that you spent

a week to ten days negotiating with the government

regarding the issuance of this quit claim deed. Do you

recall that testimony?

A. I recall testifying about it, yes.

Q. And would you advise the court what was the nature of

these negotiations that required a week to ten days of

your time.

A. I had to first find the entity who was in a position to

execute a deed at all and then I had to find the person

who had authority to order that the execution be done.

Then I had to explain the circumstances of--the financial circumstances of the property because the government was trying to sell the property at auction and

ultimately I was able to persuade the appropriate persons that if they sold the property the price that they got

for it would be less than the mortgage which was still

owed on the property and which was held in Mr. Broumas' name and that therefore they should quit claim

the deed rather than to go through this sale process

and dealing with the government I found this to be an

extraordinarily time-consuming effort.

(J.A. 569-70). A reasonable interpretation of this testimony is that the

mortgage was still held in Broumas' name in early September 1990

when he commenced negotiations with the Marshal in order to obtain

a quitclaim deed with respect to this third parcel, which was within

one year of the filing of the petition. Therefore, we reject Rogers'

argument that the bankruptcy court's finding that he transferred the

parcel between ninety days and one year of the filing of the petition

is clearly erroneous.4

_________________________________________________________________

4 This is also one of the basis on which Rogers challenges the district

court's affirmance of the bankruptcy court's decision in favor of the

Trustee with respect to Count IV, which alleged that the transfers of the

parcels located in Ocala, Florida constituted fraudulent transfers under

 15
C.

As for the antecedent debt requirement under Bankruptcy Code

§ 547(b)(2), the record supports the bankruptcy court's finding on this

issue. Specifically, the record contains a letter dated December 3,

1990, from Rogers to Broumas informing him that he sold all three

parcels located in Ocala, Florida for $115,000. In this letter Rogers

writes that "the potential profit which I may realize is . . . less than

one-half of the net sales price and less than the sum previously transferred by me to you." (J.A. 683) (emphasis added). The bankruptcy

court relied on this letter in finding that the Debtors had transferred

the Ocala, Florida parcels on account of an antecedent debt. We cannot say that its finding is clearly erroneous.

Having rejected all of Rogers' arguments with respect to Count III,

we affirm the district court's affirmance of the bankruptcy court's

assessment of liability against Rogers on Count III.

VIII.

Finally, we address the Trustee's cross-appeal of the district court's

affirmance of the bankruptcy court's decision in favor of the Defendants with respect to Count VI. In Count VI, the Trustee sought to

recover approximately $98,000 from the Defendants, which the

Trustee alleged was transferred to the Defendants during the washtrade scheme. The record reflects that Broumas used a number of

accounts, including accounts of the Defendants, to orchestrate his

_________________________________________________________________

Bankruptcy Code § 548(a). Because the evidence supports the bankruptcy court's finding that the Debtors' interest in the mortgage on the

third parcel was transferred to Rogers within one year of the filing of the

petition, we reject Rogers' challenge. We also note that Rogers has

admitted that he gave no consideration for the assignment, thus establishing under subsection (a)(2)(A) of Bankruptcy Code§ 548 that the Debtors received less than a reasonably equivalent value in exchange for the

transfer. Because Rogers does not contest the remaining element of a

fraudulent transfer under Bankruptcy Code § 548(a)--that the Debtors

were insolvent at the time of transfer--we, accordingly, affirm the district court's decision with respect to Count IV.

 16
wash-trade scheme in which he rapidly purchased and sold stock

without any beneficial change in stock ownership. According to the

Trustee, these transfers were avoidable and recoverable under Bankruptcy Code § 548(a). The Trustee specifically challenges the bankruptcy court's decision that he did not establish under subsection

(a)(2)(A) of Bankruptcy Code § 548 that the Debtors received less

than a reasonably equivalent value in exchange for the transfers. We

reject the Trustee's challenge, because the record simply contains no

evidence establishing that the Debtors' bankruptcy estate was diminished by the transfers.

IX.

In conclusion, we: (1) reverse the district court with respect to its

reversal of the bankruptcy court's entry of judgment in favor of Rogers and the Law Firm on Count I; (2) reverse the district court with

respect to its reversal of the bankruptcy court's entry of judgment in

favor of Rogers on Count II; (3) affirm the district court with respect

to its affirmance of the bankruptcy court's entry of judgment against

the Law Firm on Count II as it pertains to liability under Bankruptcy

Code § 548(a), but reverse as it pertains to the award of $50,000 and

order the Trustee instead to recover the $50,000 Deed of Trust itself;

(4) reverse the district court's entry of judgment against the Law

Firm on Counts III and IV; (5) affirm the district court's affirmance

of the bankruptcy court's entry of judgment against Rogers on Counts

III and IV; and (6) affirm the district court's affirmance of the bankruptcy court's entry of judgment in favor of Rogers and the Law Firm

on Count VI.

AFFIRMED IN PART AND REVERSED IN PART

 17