Opinion ID: 1317891
Heading Depth: 1
Heading Rank: 5

Heading: The Distinction Drawn Between Reasonably Equivalent Value in the Context of an Affirmative Defense and in the Context of Establishing a Prima Facie Claim is a Distinction Without a Difference.

Text: The Trustee notes a distinction between Agretech and United Energy. He says that Agretech dealt with affirmative defenses to actually fraudulent transfers, whereas United Energy dealt with the prima facie case for constructively fraudulent transfers. He then argues that, because of the distinction, the case at bar, a case dealing with actually fraudulent transfers, should be decided under Agretech. The distinction drawn, however, is of no significance. This is because in both analyses, a determination of reasonably equivalent value is necessary. In fact, it is United Energy, not Agretech, that provides the more complete reasonably equivalent value analysis for an initial transferee. The Trustee argues also that reasonably equivalent value is irrelevant to § 3439.04(a)(1) given the following quoted language from Agretech : United Energy is distinguishable because the issue before that court concerned payment of an antecedent debt under 11 U.S.C. § 548(a)(2), the equivalent of HAW. REV. STAT. § 651C-4(a)(2). The present issue, in contrast, concerns the avoidance of fraudulent transfers under HAW. REV. STAT. 651C-4(a)(1), the equivalent of 11 U.S.C. § 548(a)(1), where the entire transfer may be avoided, even if reasonably equivalent value was given. . . . Agretech, 916 F.2d at 538. However, the Trustee does not provide the rest of the paragraph which reads, so long as the transferor actually intended to hinder, delay or defraud its creditors and the transferee accepted the transfer without good faith.  Id. (emphasis added). For a transfer to be avoided under § 3439.04(a)(2), the equivalent of § 548(a)(1)(B), a trustee must show that the debtor made the transfer . . . without receiving reasonably equivalent value in exchange for the transfer. For a transfer to be avoided under § 3439.04(a)(1), the equivalent of § 548(a)(1)(A), a trustee does not have to show that the debtor received less than reasonably equivalent value. The transferee, however, may be entitled to keep the transfer if she can show she is a person who took in good faith and for a reasonably equivalent value . . . . CAL. CIV. CODE § 3439.08 (emphasis added). In Agretech, we properly refused to apply the reasonably equivalent value analysis in the prima facie case because the evidence showed actual intent to defraud under § 548(a)(1)(A). Agretech, 916 F.2d at 539-40. We then proceeded to the good faith defense, in which reasonably equivalent value analysis is proper. Id. at 539-40. However, we never reached the reasonably equivalent value analysis for the initial transfer because the initial transfer failed on the good faith prong of Hawaii's equivalent to § 548(c). Id. We find no reason, in statute or case law, to treat reasonably equivalent value differently for each of the Code's provisions. Both the prima facie case for constructively fraudulent transfers under § 3439.04(a)(2), and the affirmative defense to actually fraudulent transfers under § 3439.08 require the determination of whether reasonably equivalent value was transferred from the transferee to the debtor.