Opinion ID: 658239
Heading Depth: 2
Heading Rank: 3

Heading: Voidable Preference

Text: 33 GPA claims that the Nevada Supreme Court dismissal of its causes of action was a voidable preference under 11 U.S.C. Sec. 547(b) (1988). A voidable preference is a purely federal concept which accordingly was not raised in the state court. Thus, GPA was not collaterally estopped from raising this issue in the bankruptcy court. 34 In order for Sec. 547(b) to apply, a debtor must have had an interest in property that was transferred to a creditor no more than ninety days prior to the bankruptcy filing. 35 GPA asserts that it had an interest in the causes of action at the time of their dismissal, approximately fifty days before the August 4, 1989 bankruptcy filing. At oral argument, however, GPA conceded that it would have retained an interest in its claims only if the transfers pursuant to the writs of execution and sheriff's sale were fraudulent. 1 If the transfers were fully valid, then GPA had no interest in the claims during the requisite period prior to bankruptcy filing, and Sec. 547(b) does not apply to the dismissal. 36 Because we hold that the bankruptcy court was required to accord full faith and credit to the state court judgment, and was collaterally estopped from finding a fraudulent transfer, we affirm the district court's holding that the bankruptcy court exceeded its authority in holding that the state court dismissal was a voidable preference.