Opinion ID: 784124
Heading Depth: 6
Heading Rank: 2

Heading: Liability for the Provision of Services or Property

Text: 49 As previously noted, a liability for the provision of services or property cannot be the predicate liability for a QSF unless the transferor's obligation to provide services or property is extinguished by a transfer or transfers to the [purported QSF]. Treas. Reg. § 1.468B-1(f)(1). The Receiver contends that this provision applies when the basis of liability underlying the claim arises from the sale of property or services. Rec. Br. at 34. Because the victims' claims arise out of the sale of securities and the provision of brokerage services, he reasons, they would therefore come within the provision. 50 We disagree. Paragraph (f)(1) does not speak of the source of the liability. Rather, it comes into play when the transferor has an obligation to provide services or property. Perhaps there was at one time an obligation with respect to some of the victims to provide them with the securities they had paid for, but that is not the obligation addressed by the Estate. After the plan to return securities to Wellshire on behalf of the victims was terminated, the Estate was created to compensate the victims for their financial losses. The obligations being satisfied (at least in part) by the Estate were the obligations to refund the purchase price of the securities. The Estate's purpose was not to pay for services or property to be provided to the victims. Therefore, paragraph (f)(1) is not applicable. 51