Opinion ID: 29106
Heading Depth: 3
Heading Rank: 2

Heading: Consent to the Transfer

Text: Nordberg also argues that the bankruptcy court erred in finding that the transfer was not fraudulent because ABC consented to the use of the money to pay interest owed to Continental. This is also a question we review under a clearly erroneous standard. We agree with the reasoning employed by the district court in disposing of this issue on appeal. The bankruptcy court, in ruling in favor of Continental, rested its judgment on two 9 separate and distinct bases: Nordberg failed to prove constructive fraud, and ABC consented to the use of the money by expressly stating in the loan agreement that up to $6.5 million of the loan could be used as “working capital” for any of the Murchison-owned enterprises. Because either ground would be sufficient to uphold the final judgment in favor of Continental, a holding that the bankruptcy court was clearly erroneous in finding that ABC consented to transfer of funds to Continental would be no more than a harmless error. Nevertheless, we agree that, on the record, it was not clearly erroneous for the bankruptcy court to find that ABC consented to use of the funds to satisfy interest payments owed to Continental on the Financial loan. At trial, Continental presented testimony that one valid use of working capital is the payment of past-due interest (so long as the interest is not more than one year overdue). Nordberg countered that definition of “working capital” with one of his own, but the bankruptcy court found that the weight of the evidence supported a finding that ABC consented to the transfer when it permitted Topcor to use the 10 funds as “working capital.”10 The bankruptcy court’s ruling was not clearly erroneous.