Opinion ID: 748192
Heading Depth: 3
Heading Rank: 4

Heading: The Golden Seed-Baird Transaction

Text: 32 Finally, the Trustee argues that Golden Seed's payment of $127,563.00 to Baird also qualifies as an avoidable transfer under § 548. As discussed above, OMI was unable to fulfill its obligation under the contract with Golden Seed to satisfy Golden Seed's capacity requirements for seed production. Consequently, OMI subcontracted with Baird to produce soybean seed on 230 acres. The bankruptcy court recognized that there is nothing unusual for a company to subcontract with a third party to satisfy its contractual obligations. In re Ostrom-Martin, 191 B.R. at 133-34. The bankruptcy court recognized that once OMI contracted out its duties under the contract to Baird, it also relinquished any benefit it would have enjoyed under the contract. Id. 33 Baird shipped directly to Golden Seed 11,597 bags of soybean seed at a price of $11.00 per bag, and Golden Seed paid Baird the sum of $127,563.00. OMI received nothing from this transaction between Baird and Golden Seed. The bankruptcy court concluded that the subcontract between OMI and Baird was within industry standards, and Golden Seed's payment to Baird for the delivery of the bean seed was consistent with ordinary business practice. Id. The bankruptcy court concluded that OMI: 34 [P]rovided nothing under the oral contract with Golden as to those acres [contracted out to Baird]. So [OMI] is entitled to receive nothing. It was a wash transaction from OMI's perspective. If it is entitled to nothing, equivalent value is nothing. 35 Id. at 133. The district court agreed that when OMI contracted its duties to Baird, it also contracted out any benefits it would be entitled to under the contract. In re Ostrom-Martin, Inc., No. 96-1118, Slip Op. at 11. 36 The findings of the bankruptcy court as discussed above--the $69,683.88 progress payment, the value of the soybean seed, the validity of the oral contract, and the subcontract between Baird and OMI--support its conclusion that there was not a fraudulent transfer under § 548 which the Trustee could avoid. As we have recognized before, a bankruptcy court's findings on the fact-intensive issue of whether the debtor received reasonably equivalent value receives great deference. In re Bundles, 856 F.2d at 825. 37 We find absolutely no reason to substitute our judgment for that of the district court and the bankruptcy court, and we are certainly in no position to question how much weight the bankruptcy court gave to the testimony. In short, we too conclude that the bankruptcy court did not err in finding that the transfer of the soybean seed from OMI to Golden Seed is not an avoidable transfer under § 548 of the Bankruptcy Code. Accordingly, the district court did not err in its conclusion to affirm the bankruptcy court's decision that OMI received reasonably equivalent value in exchange for the transfer of the soybean seeds.