Opinion ID: 568019
Heading Depth: 3
Heading Rank: 1

Heading: Wyle v. C.H. Rider & Family

Text: 12 C.H. Rider & Family, C.H. Rider and Thomas A. Rider (collectively, Rider) bought ten modules from UEC and invested $159,127 in the form of a down payment and installment payments on a promissory note. See Wyle v. C.H. Rider & Family (In re United Energy Corp.), Ch. 11 Case No. 3-8500636-LK, Adv. No. 3-86-0409-LK, Findings of Fact and Conclusions of Law at 8-9 (Bankr.N.D.Cal. July 20, 1987). They received $23,980.40 in fictitious power payments. Id. at 9-10. The Trustee sought to avoid these power payments as a fraudulent transfer. After a trial in which Rider stipulated to the insolvency of UEC and RPC, the bankruptcy court found that the power payments to Rider were not made in exchange for reasonably equivalent value and, therefore, were avoidable by the Trustee as fraudulent transfers. See id. at 10-12, 14-15. Specifically, the bankruptcy court found that [n]o property was received by UEC or RPC in exchange for the power payments ... [and n]o antecedent debt of either UEC or RPC to Rider was satisfied or secured, in whole or in part, in exchange for the power payments. Id. at 10. From this finding, the bankruptcy court concluded as a matter of law that [n]either UEC nor RPC received a reasonably equivalent value, or any value, in property or satisfaction of a present or antecedent debt, in exchange for the power payments paid to the module purchasers. Id. at 14. The bankruptcy court further reasoned that Rider's claims for fraud were general unsecured claims which could not be offset against the fraudulent conveyances. Id.