FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN RE TRACHT GUT, LLC,

Debtor,

TRACHT GUT, LLC,

Appellant,

v.

LOS ANGELES COUNTY

TREASURER & TAX COLLECTOR;

DAVID HAGHNAZARZADEH;

YURY VOLODINSKY,

Appellees.

No. 14-60007

BAP No.

13-1229

OPINION

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Pappas, Dunn, and Taylor, Bankruptcy Judges, Presiding

Submitted February 11, 2016*

Pasadena, California

Filed September 8, 2016

* The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).
2 IN RE TRACHT GUT, LLC

Before: Jerome Farris, Richard R. Clifton,

and Carlos T. Bea, Circuit Judges.

Opinion by Judge Clifton

SUMMARY**

Bankruptcy 

The panel affirmed the Bankruptcy Appellate Panel’s

affirmance of the bankruptcy court’s dismissal, without leave

to amend, of an adversary complaint brought by a Chapter 11

debtor against the Los Angeles County Treasurer and Tax

Collector and the purchasers of two properties of the debtor.

The debtor alleged that the County’s tax sales of the

properties for prices that were too low were fraudulent

transfers voidable under 11 U.S.C. § 548(a). The panel held

that due to procedural safeguards in place for California tax

sales, the price received at a California tax sale conducted in

accordance with state law conclusively establishes

“reasonably equivalent value” for purposes of § 548(a). 

Accordingly, the sales of the debtor’s properties were not

voidable.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
IN RE TRACHT GUT, LLC 3

COUNSEL

William H. Brownstein, William H. Brownstein &

Associates, Santa Monica, California, for Appellant.

Barry S. Glaser and Susan M. Freedman, Steckbauer

Weinhart LLP, Los Angeles, California, for Appellee Los

Angeles County Treasurer.

Michael E. Schwimer, Schwimer Weinstein LLP, Santa

Monica,California, for Appellees David Haghnazarzadeh and

Yury Volodinsky.

OPINION

CLIFTON, Circuit Judge:

The Yiddish phrase “Tracht gut, vet zein gut!” translates

to “Think good, and it will be good!” Alas, such was not the

case for debtor Plaintiff-Appellant Tracht Gut, LLC. Tracht

Gut acquired two separate properties in Los Angeles County. 

Real property taxes were owing on both properties, as the

taxes had not been paid on either of the properties for years. 

The County Treasurer and Tax Collector subsequently

conducted tax sales of the properties under California law. A

short time later, Tracht Gut filed for bankruptcy relief under

Chapter 11. Tracht Gut filed an adversary complaint against

the County Treasurer and the purchasers of the two

properties, alleging that because the County sold the

properties for a price that was too low, the tax sales were

fraudulent transfers voidable under 11 U.S.C. § 548(a). The

bankruptcy court dismissed the complaint with prejudice. 
4 IN RE TRACHT GUT, LLC

The Ninth Circuit Bankruptcy Appellate Panel affirmed. In

re Tracht Gut LLC, 503 B.R. 804 (9th Cir. BAP 2014).

The central issue is whether the BAP properly extended

the rule in BFP v. Resolution Trust Corp., 511 U.S. 531

(1994) to California tax sales. In BFP, the Supreme Court

held that the price received at a mortgage foreclosure sale

“conclusively satisfies” the Bankruptcy Code’s requirement

that transfers of an insolvent debtor’s property be in exchange

for a “reasonably equivalent value,” so long as the mortgagee

complied with the relevant foreclosure laws of the state in

question, which in that case was also California. Id. at 533,

545. Because California tax sales have the same procedural

safeguards as the California mortgage foreclosure sale at

issue in BFP, we agree with the BAP and hold that the price

received at a California tax sale conducted in accordance with

state law conclusively establishes “reasonably equivalent

value” for purposes of 11 U.S.C. § 548(a). We affirm.

I. Background

This appeal concerns two properties, described as the

“Hatteras Property” and the “San Fernando Property.” On

April 9, 2012, Tracht Gut purchased the Hatteras Property

from E.R. Financial Services & Development, Inc., NH

Simpson Partnership, OF General Partnership, and EM

Partnership for $60,000.00, subject to three deeds of trust. 

On that same day, E.R. Financial conveyed the San Fernando

Property to Tracht Gut for “valuable consideration.”

Real property taxes had not been paid on either property

since 2008. Both properties were thus “tax defaulted” under

California state law, and subject to the County’s power to

sell. On August 31, 2012, the County served a Notice of
IN RE TRACHT GUT, LLC 5

Auction for a tax sale for each of the properties on all

interested parties. On October 22, 2012, the County

Treasurer sold both properties at public auction. DefendantAppellee David Haghnazarzadeh purchased the Hatteras

Property for $300,000.00, and Defendant-Appellee Yury

Volodinsky purchased the San Fernando Property for

approximately $100,000.00.

Tracht Gut filed for bankruptcy protection under Chapter

11 on November 27, 2012, just over a month after the tax

sales of the two properties. On December 11, 2012, Tracht

Gut filed its Schedule A, in which it asserted:

A disputed tax sale occurred on or about

October 21, 2012. The sales price was far less

than the market value of this property. Debtor

attempted to pay the taxes in full, which the

[County] refused to take. As of the date of

this petition, no Tax Deed has been recorded

and Debtor disputes the validity of the transfer

as an avoidable transfer.

The next day, Tracht Gut commenced the adversary

proceeding that is the subject of this appeal.1 Tracht Gut’s

adversary complaint asserted five claims: (1) that the sales

were fraudulent transfers under 11 U.S.C. §§ 548 and 549 and

California Civil Code § 3275; (2) for declaratory relief;

(3) for an injunction; (4) for unjust enrichment; and (5) for

violation of the automatic stay of all actions proceeding

1 One day after that, on December 13, 2012, the County recorded the tax

deeds transferring title of the two properties to Haghnazarzadeh and

Volodinsky.
6 IN RE TRACHT GUT, LLC

against Tracht Gut at the time of the bankruptcy filing

pursuant to 11 U.S.C. § 362.

The County moved to dismiss the complaint under

Federal Rule of Civil Procedure 12(b)(6) and Federal Rule of

Bankruptcy Procedure 7012. It argued that Tracht Gut had

failed to allege any facts in its complaint to support the

granting of relief on any of its claims. Indeed, Tracht Gut’s

complaint contained only an allegation that the tax sales had

been conducted and a list of claims for relief, without the

allegation of any other facts to support the claims. The

County also argued that the properties should be conclusively

presumed to have been transferred for reasonably equivalent

value, insofar as they were sold at a regularly scheduled tax

sale with competitive bidding procedures, all in compliance

with applicable state law.

The bankruptcy court entered an order dismissing the

complaint with prejudice and without leave to amend on

March 13, 2013, concluding that Tracht Gut had not properly

alleged a cause of action under 11 U.S.C. §§ 548, 549, or 362,

and that it would not be possible to amend the complaint to

state a viable cause of action. Thereafter, Tracht Gut filed a

motion for reconsideration, with an attached proposed First

Amended Complaint. The proposed First Amended

Complaint contained further allegations about the purported

market value of the two properties and the resulting loss of

equity following the tax sales in support of its 11 U.S.C.

§ 548 fraudulent transfer claim. The bankruptcy court denied

Tracht Gut’s motion for reconsideration on May 7, 2013,

concluding that the proposed First Amended Complaint was

still not viable. The bankruptcy court added that Tracht Gut’s

tardiness in presenting more specific factual allegations to

support its claim “was purposeful and a delaying tactic.”
IN RE TRACHT GUT, LLC 7

Tracht Gut appealed both the bankruptcy court’s

dismissal order and its order denying reconsideration to the

BAP, which affirmed. In re Tracht Gut LLC, 503 B.R. 804

(9th Cir. BAP 2014). The BAP held that Tracht Gut failed to

state a claim in its original complaint, and that the bankruptcy

court had the discretion to deny leave to amend because

amendment would have been futile. Id. at 810–18. The BAP

relied on the Supreme Court’s opinion in BFP. Id. at 815–18. 

Although the Supreme Court expressly limited its holding in

BFP to mortgage foreclosures, 511 U.S. at 537 n.3, the BAP

concluded that the reasoning underpinning the Court’s

holding in BFP also applied to tax sales under California law. 

In re Tracht Gut, 503 B.R. at 815–18.

II. Discussion

This court reviews the decisions of the BAP de novo and

applies the standard of review applied by the BAP to the

decisions of the bankruptcy court. Retz v. Samson (In re

Retz), 606 F.3d 1189, 1196 (9th Cir. 2010). The BAP

reviews a bankruptcy court’s dismissal under Federal Rule of

Civil Procedure 12(b)(6) de novo. AE ex rel. Hernandez v.

Cnty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012). A

dismissal granted without leave to amend and with prejudice

is reviewed for abuse of discretion. Id. Denial of a motion

for reconsideration under Federal Rule of Civil Procedure

60(b)(1) is also reviewed for abuse of discretion. Morris v.

Peralta (In re Peralta), 317 B.R. 381, 385 (9th Cir. BAP

2004).

A. Motion to Dismiss

A motion to dismiss in an adversary bankruptcy

proceeding is governed by Federal Rule of Bankruptcy
8 IN RE TRACHT GUT, LLC

Procedure 7012(b), which incorporates Federal Rule of Civil

Procedure 12(b)–(i). Agarwal v. Pomona Valley Medical

Group, Inc. (In re Pomona Valley Med. Grp., Inc.), 476 F.3d

665, 671–72 (9th Cir. 2007). At the motion to dismiss phase,

the trial court must accept as true all facts alleged in the

complaint and draw all reasonable inferences in favor of the

plaintiff. Maya v. Centex Corp., 658 F.3d 1060, 1067–68

(9th Cir. 2011). However, the trial court does not have to

accept as true conclusory allegations in a complaint or legal

claims asserted in the form of factual allegations. Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 555–56 (2007). To

survive a motion to dismiss, a plaintiff must aver in the

complaint “sufficient factual matter, accepted as true, to ‘state

a claim to relief that is plausible on its face.’” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S.

at 570). A dismissal under Rule 12(b)(6) may therefore be

based on either the lack of a cognizable legal theory or on the

absence of sufficient facts alleged under a cognizable legal

theory. Johnson v. Riverside Healthcare Sys., LP, 534 F.3d

1116, 1121 (9th Cir. 2008).

The bankruptcy court correctly dismissed Tracht Gut’s

complaint for failure to state a claim under Federal Rule of

Civil Procedure 12(b)(6) and Federal Rule of Bankruptcy

Procedure 7012. Tracht Gut’s adversarycomplaint contained

no statement of facts. After establishing jurisdiction and

venue, Tracht Gut simply listed its five claims for relief. 

Tracht Gut’s first claim for relief asserted that the tax sales

were avoidable fraudulent transfers under 11 U.S.C.

§§ 548–49, as well as under California Civil Code § 3275. 

Tracht Gut failed to allege any specific facts that would

support an inference that the tax sales were avoidable

fraudulent transfers either under the Bankruptcy Code or

under California state law. Instead, Tracht Gut merelyrecited
IN RE TRACHT GUT, LLC 9

the elements of a fraudulent transfer as they appear in

11 U.S.C. § 548. Simply put, Tracht Gut’s fraudulent transfer

claim contained only a “[t]hreadbare recital[] of the elements

of a cause of action,” making dismissal proper. Iqbal,

556 U.S. at 678.

Tracht Gut’s second and third claims were generalized

prayers for declaratory and injunctive relief, respectively, and

did not contain a cognizable legal theory or a factual basis

supporting such a theory. See Johnson, 534 F.3d at 1121. 

Tracht Gut’s fourth claim, unjust enrichment, and fifth claim,

violation of 11 U.S.C. § 362, were also both devoid of any

factual matter in support of their allegations. Because Tracht

Gut failed to state a cognizable claim for relief supported by

facts to establish the plausibility of such a claim, the

bankruptcy court’s dismissal of Tracht Gut’s complaint was

proper.

B. Leave to Amend

The primary issue is whether the bankruptcy court abused

its discretion in dismissing Tracht Gut’s complaint without

first granting Tracht Gut leave to amend. A partymay amend

its complaint within twenty-one days of service, or within

twenty-one days of service of a responsive pleading or a

motion brought under Federal Rule of Civil Procedure 12(b),

(e), or (f). Fed. R. Civ. P. 15(a). Otherwise, a party may only

amend its complaint with written consent from the opposing

party or with leave from the court, which the court should

freely give when justice so requires. Id. Tracht Gut did not

seek leave to amend its complaint within twenty-one days of

service of Defendants’ Rule 12(b)(6) motion, making leave

to amend discretionary.
10 IN RE TRACHT GUT, LLC

In Foman v. Davis, 371 U.S. 178 (1962), the Supreme

Court set forth the following standard regarding motions for

leave to amend:

If the underlying facts or circumstances relied

upon by a plaintiff may be a proper subject of

relief, he ought to be afforded an opportunity

to test his claim on the merits. In the absence

of any apparent or declared reason – such as

undue delay, bad faith or dilatory motive on

the part of the movant, repeated failure to cure

deficiencies by amendments previously

allowed, undue prejudice to the opposing

party by virtue of allowance of the

amendment, futility of amendment etc. – the

leave sought should, as the rules require, be

“freely given.” Of course, the grant or denial

of an opportunity to amend is within the

discretion of the District Court, but outright

refusal to grant the leave without any

justifying reason appearing for the denial is

not an exercise of discretion; it is merely

abuse of that discretion and inconsistent with

the spirit of the Federal Rules.

Id. at 182. We have held that trial courts should determine

whether to allow leave to amend by ascertaining the presence

of four factors: bad faith, undue delay, prejudice to the

opposing party, and futility. Griggs v. Pace Am. Grp., Inc.,

170 F.3d 877, 880 (9th Cir. 1999). Here, the bankruptcy

court denied leave to amend because it determined that

amendment would be futile and because it concluded that
IN RE TRACHT GUT, LLC 11

Tracht Gut had unduly delayed in presenting specific factual

allegations in support of its fraudulent transfer claim.2

As noted above, in BFP v. Resolution Trust Corp.,

511 U.S. 531 (1994), the Supreme Court held that a

prepetition mortgage foreclosure sale conducted in

accordance with state law conclusively established that the

price obtained at that sale was for reasonably equivalent

value. Under 11 U.S.C. § 548(a), a transfer of a debtor’s

property made within two years of the filing of the petition

can be avoided if, among other conditions, “less than a

reasonably equivalent value” was received in exchange. The

Court’s holding that the amount received through a mortgage

foreclosure sale constituted “reasonably equivalent value”

meant that the transaction was not subject to being found

fraudulent under that provision.

In its opinion in BFP, however, the Court expressly

limited that holding to mortgage foreclosures of real estate.

“The considerations bearing upon other foreclosures and

forced sales (to satisfy tax liens, for example) may be

different.” BFP, 511 U.S. at 537 n.3.

The BAP held that the Court’s holding in BFP should also

apply to tax sales conducted in accordance with California

law. In re Tracht Gut, 503 B.R. at 817. As a result, it agreed

with the bankruptcy court that amendment would have been

futile because the County’s legally conducted tax sales of the

2

In its order dismissing the complaint without leave to amend, the

bankruptcy court discussed only the futility of amendment. In the

bankruptcycourt’s order denyingTracht Gut’s motion for reconsideration,

the court also discussed Tracht Gut’s undue delay in moving for leave to

amend.
12 IN RE TRACHT GUT, LLC

two subject properties could not constitute fraudulent

transfers under 11 U.S.C. § 548. Id. at 818. We agree as

well. The conclusive rule regarding mortgage foreclosures

established by BFP should also apply to tax sales in

California, because the rationale and policy considerations

behind the Court’s holding in BFP are just as relevant in the

California tax sale context.

Responding to the argument that the sales price of a

property resulting from a foreclosure sale was too low when

compared to fair market value, the Court explained in BFP

that “market value, as it is commonly understood, has no

applicability in the forced-sale context” and that “[market

value] is the very antithesis of forced-sale value.” BFP,

511 U.S. at 537. The Court then explained that because state

law allows the forced sales of real estate, property sold at

such sales is “simply worth less” than property “sold at

leisure and pursuant to normal marketing techniques.” Id. at

539. Thus, the lower price obtained at a foreclosure sale,

when compared to a fair market valuation, is a result of the

mechanism of forced sales, rather than a “badge of fraud”

under the law of fraudulent transfers. Id. at 542–43. “Absent

a clear statutory requirement to the contrary, we must assume

the validity of this state-law regulatory background and take

due account of its effect.” Id. at 539. The Court reasoned

that if debtors were able to avoid mortgage foreclosures under

federal bankruptcy law simply because the property was sold

for below market value at the foreclosure sale, the state

regulatory regime in which creditors can conduct forced sales

on foreclosed property would be frustrated. See id. at

537–39.

The Court’s rationale also applies to tax sales. As stated

by the BAP, “federal courts should pay considerable
IN RE TRACHT GUT, LLC 13

deference to state law on matters relating to real estate.” In

re Tracht Gut, 503 B.R. at 816. Like mortgage foreclosures,

tax foreclosure sales conducted by state and local

governments are governed by state law.

The same procedural safeguards under California law that

led the Supreme Court to conclude that mortgage foreclosures

would yield reasonably equivalent value are also required in

California for tax sales. “Foreclosure laws typically require

notice to the defaulting borrower, a substantial lead time

before the commencement of foreclosure proceedings,

publication of a notice of sale, and strict adherence to

prescribed bidding rules and auction procedures.” BFP,

511 U.S. at 542.

Pursuant to Cal. Rev. & Tax Code § 3691(a)(1)(A), the

tax collector has the power to sell tax-defaulted property that

has not been redeemed after the property has been in default

for three years for commercial real estate, and five years for

residential real estate. Id. This three- or five-year period

provides a “substantial lead time,” one of the factors

identified as an important safeguard in BFP. 511 U.S. at 542.

In addition, when a property becomes available for tax

sale, the tax collector must file notice with the county clerk,

and that notice is recorded. Cal. Rev. & Tax Code §§ 3691.1,

3691.2, 3691.4. The tax collector is also required to send

notice of the tax sale to all interested parties between 45 and

120 days before the proposed sale. Cal. Rev. & Tax Code

§ 3701. Notice must also be sent to the defaulting party, Cal.

Rev. & Tax Code § 3691(a)(3)(A), and be published in a

newspaper of general circulation weekly for three weeks, Cal.

Rev. & Tax Code § 3702. The notice must contain: (a) date,

time, and place of the sale; (b) location of publicly available
14 IN RE TRACHT GUT, LLC

computer workstations if the sale allows internet bids;

(c) description of the property; (d) name of the last assessee

of the property; (e) minimum bid; (f) statement that the right

of redemption terminates the day before the sale;

(g) statement that parties of interest have the right to file

claims for any sale proceeds in excess of liens and costs;

(h) statement that parties will be notified of any excess

proceeds; (i) date, time, and place of subsequent sale if

property remains unsold after present sale; (j) amount of

deposit required to submit bids on the property, if so required;

(k) statement that if property is purchased by a credit bid, the

right of redemption will revive if full payment is not made by

a specified date. Cal. Rev. & Tax Code § 3704. Tax sales

conducted in accordance with these requirements provide

notice comparable to that required under the foreclosure laws

at issue in BFP. See 511 U.S. at 542.

Finally, Cal. Rev. & Tax Code § 3693 requires that all tax

sales shall be at public auction to the highest bidder. “Any

person, regardless of any prior or existing lien on, claim to, or

interest in, the property, may purchase at the sale.” Cal. Rev.

& Tax Code § 3691(a)(1)(A). After a tax sale, the tax

collector is required to execute a deed to the purchaser for the

property. Cal. Rev. & Tax Code § 3708. The tax deed is

“conclusive evidence of the regularity of all proceedings from

the assessment of the assessor to the execution of the deed.” 

Cal. Rev. & Tax Code § 3711. The conclusive nature of the

tax deed establishes that tax sales in California are conducted

with “strict adherence to prescribed bidding rules and auction

procedures.” BFP, 511 U.S. at 542.

This Court has extended BFP beyond the context of

mortgage foreclosures before. In Batlan v. Bledsoe (In re

Bledsoe), 569 F.3d 1106 (9th Cir. 2009), Jennifer Bledsoe
IN RE TRACHT GUT, LLC 15

had recently divorced her ex-husband, Ryan Bledsoe. Id. at

1108. A state court awarded nearly all of the couple’s marital

property to Ryan, citing Jennifer’s misconduct in the divorce

proceedings. Id. When Jennifer later filed for bankruptcy

under Chapter 11, her trustee brought an adversary

proceeding against Ryan, seeking to avoid the property

transfers required by the dissolution judgment. Id. Because

the judgment was “inequitable,” the trustee argued, the

property transfers it required were for less than “reasonably

equivalent value,” and hence were constructively fraudulent

under § 548. Id. at 1108 & n. 1. The bankruptcy court

disagreed and granted summary judgment in favor of Ryan.

The district court affirmed, and the trustee appealed. Id.

This Court affirmed. It held that under BFP, “a state

court’s dissolution judgment, following a regularlyconducted

contested proceeding, conclusively establishes ‘reasonably

equivalent value’ for the purpose of § 548, in the absence of

actual fraud.” Id. at 1112. This was because “[t]he state’s

traditional interest in the regulation of marriage and divorce

is at least as powerful as its traditional interest in regulating

sales of real property,” and “[a]voiding transfers made

pursuant to a state-court dissolution judgment would

seriously impinge on that traditional state interest.” Id. If the

distribution of marital property following the dissolution of

a marriage is similar enough to state-law mortgage

foreclosure to warrant the extension of BFP, then surely so is

a state-law tax sale.

We also note that the Fifth and Tenth Circuits have

explicitly extended BFP to tax sales. See T.F. Stone Co. v.

Harper (In re T.F. Stone Co.), 72 F.3d 466, 472 (5th Cir.

1995) (holding that under BFP, a tax sale done in accordance

with state law satisfied 11 U.S.C. § 549’s “present fair
16 IN RE TRACHT GUT, LLC

equivalent value” requirement, which the court read as

mirroring § 548’s “reasonably equivalent value”

requirement); Kojima v. Grandote Int’l Ltd. Liab. Co. (In re

Grandote Country Club, Ltd.), 252 F.3d 1146, 1152 (10th Cir.

2001) (holding that BFP applies to tax sales challenged under

a state fraudulent transfer law, so long as state law requires

competitive bidding procedures).3

Although certain bankruptcy courts have declined to

extend BFP to prepetition tax sales, that was because of

identified deficiencies in the tax sale procedures of the states

in question. See, e.g., Berley Assocs. v. Eckert (In re Berley

Assocs.), 492 B.R. 433, 440–41 (Bankr. D. N.J. 2013)

(holding that BFP does not apply to prepetition tax sales in

New Jersey because such sales do not require competitive

bidding or advertising); Herkimer Forest Prod. Corp. v. Cnty.

of Clinton (In re Herkimer Forest Prod. Corp.), Bankr. No.

04-13978, Adv. No. 04-90148, 2005 WL 6237559, at *3–4

(Bankr. N.D.N.Y. July 26, 2005) (memorandum disposition)

(holding that BFP does not apply to prepetition tax sales,

noting the absence of public sale and competitive bidding

safeguards).

Because the policy of deferring to state law on matters of

real estate applies as much to tax sales as to mortgage

foreclosures, and because tax sales in California contain the

procedural safeguards that apply to mortgage foreclosures, a

tax sale conducted in accordance with California state law

conclusively establishes that the price received at the tax sale

was for reasonably equivalent value. That means that the sale

3 While T.F. Stone concerned a post-petition tax sale, Grandote Country

Club, like this case, dealt with a prepetition tax sale.
IN RE TRACHT GUT, LLC 17

did notrepresent a fraudulenttransfer under 11U.S.C. § 548(a).

In this case, Tracht Gut’s proposed First Amended

Complaint did not allege any procedural defects with either

of the tax sales and instead alleged only that the sales price

was too low in each instance. In light of the presumption that

the price received at the tax sale was for reasonably

equivalent value absent procedural irregularity, amendment

would have been futile. The bankruptcy court’s denial of

leave to amend was not an abuse of discretion.4

C. Motion for Reconsideration

Tracht Gut also appeals the bankruptcy court’s denial of

its motion for reconsideration under Federal Rule of Civil

Procedure 60(b), which provides: “On motion and just terms,

the court may relieve a party or its legal representative from

a final judgment, order, or proceeding for,” among other

things, “mistake, inadvertence, surprise, or excusable

neglect.” In its moving papers, Tracht Gut argued that

excusable neglect should serve as a basis for reconsideration. 

Tracht Gut failed, however, to identify any instance of

neglect that was excusable, let alone explain how excusing its

neglect would have produced any different result in light of

the futility of Tracht Gut’s proposed amended complaint.

4 Although we need not decide whether Tracht Gut’s undue delay in

seeking amendment afforded the bankruptcy court the discretion to deny

leave to amend, we note that undue delay alone cannot serve as the basis

for the denial of leave to amend. See, e.g., Lockheed Martin Corp. v.

Network Solutions, Inc., 194 F.3d 980, 986 (9thCir. 1999) (“[D]elay is not

a dispositive factor in the amendment analysis.”).
18 IN RE TRACHT GUT, LLC

III. Conclusion

A tax sale conducted in accordance with California law

conclusively establishes that the price obtained at that sale

was for reasonably equivalent value, just as the California

mortgage foreclosure sale did in BFP. Tracht Gut’s initial

complaint was properly dismissed because it did not allege

facts sufficient to support a plausible claim of fraudulent

transfer. Leave to amend was properly denied because Tracht

Gut’s proposed amendment would have been futile. The

proposed amended complaint alleged only that the tax sales

resulted in prices that were too low in comparison with fair

market value and did not allege that the tax sales were not

properly conducted under California law. Because it was

conclusivelyestablished that reasonablyequivalent value was

obtained for the properties sold at the tax sales, those sales

could not have been fraudulent transfers under 11 U.S.C.

§ 548(a).

AFFIRMED.