Opinion ID: 586923
Heading Depth: 2
Heading Rank: 2

Heading: Unreasonably Small Capital

Text: 21 The Trustee also argues that the bankruptcy court erred in finding that the Loan Agreement did not leave Loyal with unreasonably small capital. We are not persuaded. The bankruptcy court found that the evidence on this issue was conflicting but that Loyal had been doing fine with a small capitalization for years and in fact was netting $30,000 per month at the time the parties entered into the Loan Agreement. In addition, the court found that Loyal's eventual demise was due not to the increased loan payments under the April 25, 1986, agreement but to cutbacks in government cheese programs, which had been a mainstay of Loyal's business. We agree with the district court that these findings of fact are not clearly erroneous.