Court Opinion

ID: 2964918
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:32:58.301674+00
Date Added: 2024-06-11T11:43:03.650126
License: Public Domain

USCA1 Opinion

	

                           UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
       No. 96-1642
                            ED PETERS JEWELRY CO., INC.,
                                Plaintiff, Appellant,
                                         v.
                          C & J JEWELRY CO., INC., ET AL.,
                               Defendants, Appellees.
                                                    
                    APPEAL FROM THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF RHODE ISLAND
                 [Hon. Francis J. Boyle, Senior U.S. District Judge]
                                                    
                                       Before
                               Torruella, Chief Judge,
                       Aldrich and Cyr, Senior Circuit Judges.
                                                    
            Robert  
                    Corrente, with whom   Corrente,  
                                                    Brill  
                                                           &  
                                                             Kusinitz,  
                                                                        Ltd.,
       Sanford J. Davis
                        and 
                            McGovern & Associates
                                                 were on brief for appellant.
            John A. Houlihan
                            , with whom 
                                       Edwards & Angell
                                                        and 
                                                           Marc A. Crisafulli
       were on brief for appellees Fleet National Bank and Fleet Credit Corp.
            James  
                   J.  
                      McGair, with whom   McGair  
                                                 &  
                                                    McGair was on brief for
       appellees C & J Jewelry Co., Inc. and William Considine, Sr.
                                                    
                                   August 29, 1997
                                                    

                    CYR, Senior Circuit Judge. Plaintiff Ed Peters Jewelry
          Co., Inc. ("Peters") challenges a district court judgment entered
          as a matter of law pursuant to Fed. R. Civ. P. 50(a) in favor of
          defendants-appellees on Peters' complaint to recover $859,068 in
          sales commissions from Anson, Inc. ("Anson"), a defunct jewelry
          manufacturer, its chief executive officer (CEO) William Considine,
          Sr. ("Considine"), its secured creditors Fleet National Bank and
          Fleet Credit Corporation (collectively: "Fleet"), and C & J Jewelry
          Company ("C & J"), a corporate entity formed to acquire Anson's
          operating assets. We affirm the district court judgment in part,
          and vacate and remand in part.
                                          I
                                     BACKGROUND
                    We restrict our opening factual recitation to an
          overview, reserving further detail for discussion in connection
          with discrete issues. Anson, a Rhode Island jewelry manufacturer,
          emerged from a chapter 11 reorganization proceeding in 1983.
          Thereafter, Fleet routinely extended it revolving credit, secured
          by blanket liens on Anson's real property and operating assets.
                    In January 1988, Anson executed a four-year contract
          designating Peters, a New York corporation, as one of its sales
          agents. Peters serviced Tiffany's, an account which represented
          roughly one third of all Anson sales. By the following year,
                              
               The facts are related in the light most favorable to appellant
          Peters, the nonmoving party. See Fed. R. Civ. P. 50(a); 
                                                                 Coyante v.
          Puerto Rico Ports Auth., 105 F.3d 17, 21 (1st Cir. 1997).
                                          2

          however, Anson had fallen behind in its commission payments to
          Peters. During 1991, in response to Anson's dire financial straits
          and the adverse business conditions prevailing in the domestic
          jewelry industry at large, Fleet restructured Anson's loan
          repayment schedule and assessed Anson an $800,000 deferral fee. In
          1992, after determining that Anson had not achieved the pre-tax,
          pre-expense earnings level specified in the 1991 loan restructuring
          agreement, Fleet waived the default and loaned Anson additional
          monies, while expressly reserving its right to rely on any future
          default. Anson never regained solvency.    See Fleet Credit Memo
          (10/14/93), at 6 ("[Anson] is . . . technically insolvent, with a
          negative worth of $6MM at 12/31/92.").
                    Fleet and Anson entered into further loan restructuring
          negotiations in April 1993, after Fleet determined that Anson had
          not achieved the prescribed earnings target for December 1992.
          Fleet gave Anson formal written notice of the default.
                    During May 1993, Considine, Anson's CEO, submitted a
          radical "restructuring" proposal to Fleet, prompted by the fact
          that Anson owed numerous creditors, including Peters, whose claims
          represented a serious drain on its limited resources. Considine
          recommended that Fleet foreclose on Anson's assets, that Anson be
          dissolved, and that a new company be formed to acquire the Anson
          assets and carry on its business. The Considine recommendation
          stated: "If Fleet can find a way to foreclose [Anson] and sell
          certain assets to our [new] company that would eliminate most of
          the liabilities discussed above [
                                          viz., including the Peters debt],
                                          3

          then we would offer Fleet . . . $3,250,000." The $3,250,000 offer
          to Fleet also contemplated, however, that the new company would
          assume all Anson liabilities to essential trade creditors. Other-
          wise, Fleet was to receive only $2,750,000 for the Anson assets
          following the Fleet foreclosure and Fleet would assume "all the
          liabilities and the problems attached to it and, hopefully, be able
          to work them out."
                    Fleet agreed, in principle, to proceed with the proposed
          foreclosure sale, noting reservations respecting only the foreclo-
          sure price and the recommendation by Considine that the debt due
          Peters neither be satisfied by Anson nor assumed by the new
          company. In the latter regard, Fleet advised that its "counsel
          [was] not convinced that you will be able to do this without
          inviting litigation," and that "there may be a problem on this
          issue." 
                    In October 1993, Fleet gave Anson formal notice that its
          operating assets were to be sold in a private foreclosure sale to
          a newly-formed corporation: C & J Jewelry. Ostensibly out of
          concern that Tiffany's might learn of Anson's financial difficul-
          ties, and find another jewelry manufacturer, Fleet did not invite
          competing bids for the Anson operating assets.
                    Meanwhile, Peters had commenced arbitration proceedings
          against Anson, demanding payment of its unpaid sales commissions.
          Peters subsequently secured two arbitration awards against Anson
          for $859,068 in sales commissions. The awards were duly confirmed
          by the Rhode Island courts. 
                                          4

                    On October 22, 1993, Anson ceased to function; C & J
          acquired its operating assets in a private foreclosure sale from
          Fleet and thereupon continued the business operations without
          interruption. After the fact, Anson notified Peters that all Anson
          operating assets had been sold to C & J at foreclosure, by Fleet.
                    C & J was owned equally by the Considine Family Trust and
          Gary Jacobsen. Considine, Gary Jacobsen and Wayne Elliot, all
          former Anson managers, became the joint C & J management team.
          Jacobsen and Considine acquired the Anson operating assets from
          Fleet for approximately $500,000 and Fleet immediately deposited
          $300,000 of that sum directly into various accounts which had been
          established at Fleet in the name of C & J. The $300,000 deposit
          was to be devoted to capital expenditures by C & J. Fleet itself
          financed the remainder of the purchase price (approximately $1.4
          million), took a security interest in all C & J operating assets,
          and received $500,000 in C & J stock warrants scheduled to mature
          in 1998. C & J agreed to indemnify Fleet in the event it were held
          liable to any Anson creditor.     See Credit Agreement q 8.10.
          Considine received a $200,000 consulting fee for negotiating the
          sale. 
                    In December 1993, Fleet sold the Anson real estate for
          $1.75 million to Little Bay Realty, another new company incorporat-
          ed by Considine and Jacobsen. Considine and Jacobsen settled upon
          the dual-company format in order to protect their real estate
          investment in the event C & J itself were to fail. The two
          principals provided an additional $500,000 in capital, half of
                                          5

          which was used to enable Little Bay Realty to acquire the Anson
          real estate from Fleet. The remainder was deposited in a Little
          Bay Realty account with Fleet, to be used for debt service. Fleet
          in turn advanced the $1.5 million balance due on the purchase
          price. Little Bay leased the former Anson business premises to C
          & J.
                    In April 1994, Peters instituted the present action in
          federal district court, alleging that Anson, C & J (as Anson's
          "successor"), Considine, and Fleet had violated Rhode Island
          statutory law governing bulk transfers and fraudulent conveyances,
          and asserting common law claims for tortious interference with
          contractual relations, breach of fiduciary duty, wrongful foreclo-
          sure, and "successor liability." The complaint essentially alleged
          that all defendants had conspired to conduct a sham foreclosure and
          sale for the purpose of eliminating Anson's liabilities to certain
          unsecured creditors, including the $859,068 debt due Peters in
          sales commissions.
                    The defendants submitted a motion in limine to preclude
          the testimony of two witnesses 
                                           former banker Richard Clarke and
          certified public accountant John Mathias      who were to have
          provided expert testimony on the value of the Anson assets.
          Ultimately, their testimony was excluded by the district court on
          the grounds that their valuation methodologies did not meet minimum
          standards of reliability and, therefore, their testimony would not
          have aided the jury.
                    Finally, after Peters rested its case in chief, the
                                          6

          district court granted judgment as a matter of law for all
          defendants on all claims. The court essentially concluded that
          neither Peters nor other Anson unsecured creditors had been wronged
          by the private foreclosure sale, since Fleet had a legal right to
          foreclose on the encumbered Anson assets which were worth far less
          than the amount owed Fleet. 
                                         II
                                     DISCUSSION
          A.   Exclusion of Expert Testimony 
                    Many of the substantive claims asserted by Peters depend
          largely upon whether Fleet was an    oversecured creditor,  i.e.,
          whether the Anson assets were worth more than the total indebted-
          ness Anson owed Fleet as of the October 1993 foreclosure. Other-
          wise, since Fleet had a legal right to foreclose on all the Anson
          assets, there could have been no surplus from which any Anson
          unsecured or judgment creditor, including Peters, could have
          recovered anything. Thus, evidence on the value of the Anson
          assets at the time of the Fleet foreclosure was critical.
                    Peters proffered the testimony of CPA John Mathias on the
          value of the Anson assets. During voir dire, Mathias testified
          that the total Anson indebtedness to Fleet amounted to $9,828,000,
          but that the total value of its assets was $12,738,500.     The
                              
               A breakdown of the Mathias methodology follows:
          Asset                    Maximum        Average        Minimum
                                   Value          Value          Value 
                                                                           
                                          7

          district court granted the motion in limine in all respects. 
               1.   Standard of Review
                    Peters tendered the Mathias testimony pursuant to Fed. R.
          Evid. 702, which requires trial courts to assess expert-witness
          proffers under a three-part standard. 
                                               Bogosian v. 
                                                           Mercedes-Benz of
          N.A., 
                Inc., 104 F.3d 472, 476 (1st Cir. 1997). The trial court
          first must determine whether the putative expert is "qualified by
          'knowledge, skill, experience, training, or education.'"      Id.
          (citation omitted). Second, it inquires whether the proffered
          testimony concerns "'scientific, technical, or other specialized
          knowledge.'" Id. (citation omitted). Finally, it must perform its
          gatekeeping function, by assessing whether the testimony "will
          assist the trier of fact to understand the evidence or to determine
          a fact in issue."  Id. Thus, the trial court must decide whether
                              
          Accounts Receivable      1,500.000      1,500,000      1,500,000
          Other Sales (Unrecorded)   418,000        409,000        400,000
          Other Sales (Backlog)      400,000        400,000        400,000
          Inventory                2,648,000      2,648,000      2,648,000
          Machinery/Equipment        450,000        375,000        300,000
          Real Estate              2,941,000      2,941,000      2,941,000
          Intangible assets        2,714,000      1,998,500      1,283,000
          Net Operating Losses     1,442,000      1,267,000      1,092,000
          Life Insurance Policy    1,200,000      1,200,000      1,200,000
          _________________________________________________________________
          Total     (Avg)                         12,738,500
          (less) Fleet Debt                       (9,828,000)
          Amount Fleet Oversecured                 2,910,500
               Evidence Rule 702 provides: "If scientific, technical, or
          other specialized knowledge will assist the trier of fact to
          understand the evidence or to determine a fact in issue, a witness
          qualified as an expert by knowledge, skill, experience, training,
          or education, may testify thereto in the form of an opinion or
          otherwise." Fed. R. Evid. 702.
                                          8

          the proposed testimony, including the methodology employed by the
          witness in arriving at the proffered opinion, "rests on a 
                                                                   reliable
          foundation and is 
                           relevant to the facts of the case."  Id. at 476,
          479 (citing Daubert v. Merrell 
                                          Dow 
                                              Pharms., 
                                                       Inc., 509 U.S. 579,
          591, (1993)) (emphasis added); 
                                        Vadala v. 
                                                  Teledyne Indus., Inc.
                                                                       , 44
          F.3d 36, 39 (1st Cir. 1995). Finally, the circumspect and deferen-
          tial standard of review applicable to Rule 702 rulings contemplates
          their affirmance absent manifest trial-court error. Bogosian, 104
          F.3d at 476 (noting that "an expert witness's usefulness is almost
          always a case-specific inquiry");    see also  United  
                                                                 States v.
          Schneider, 111 F.3d 197, 201 (1st Cir. 1997) ("In [determining] .
          . . relevance, . . . reliability, helpfulness[,] the district court
          has a comparative advantage over an appeals panel . . . [and] is
          closer to the case.").
               2.   Total Anson Indebtedness
                    The district court ruled that the proffered testimony
          from Mathias, fixing the total Anson indebtedness to Fleet at
          $9,828,000, was patently flawed. For one thing, Mathias admitted
                              
               The United States Supreme Court has granted certiorari in
          Joiner v. General 
                            Elec. 
                                  Co., 78 F.3d 524 (11th Cir. 1996),  cert.
          granted, 117 S. Ct. 1243 (1997), wherein the Eleventh Circuit held
          that Daubert requires appellate courts to employ a more stringent
          standard than "abuse of discretion" in reviewing trial court
          "gatekeeping" rulings at the summary judgment or directed judgment
          stage. See 
                     Cortes-Irizarry v. 
                                        Corporacion Insular de Seguros
                                                                      , 111
          F.3d 184, 189 n.4 (1st Cir. 1997); 
                                            compare 
                                                    Joiner, 78 F.3d at 529,
          and 
             In re Paoli R.R. Yard PCB Litig.
                                             , 35 F.3d 717, 749-50 (3d Cir.
          1994) (same), 
                       with 
                            Duffee v. 
                                      Murray Ohio Mfg. Co.
                                                         , 91 F.3d 1410-11,
          1411 (10th Cir. 1996) (
                                Daubert requires customary abuse-of-discre-
          tion review), and Buckner v. Sam's 
                                              Club, 
                                                    Inc., 75 F.3d 290, 292
          (7th Cir. 1996) (same). As the district court ruling was proper
          under either standard, we need not opt between them.
                                          9

          not including the $800,000 deferral fee Anson owed Fleet in
          connection with the 1991 loan restructuring, see supra Section I,
          even though he did not question its validity. Moreover, Mathias
          conceded that he had no independent knowledge regarding the total
          Anson indebtedness, but compiled the $9,828,000 figure from
          unspecified Fleet documents. Thus, Peters adduced no competent
          evidence that the total Anson indebtedness was less than
          $10,628,000. 
               3.   Value of the Fleet Security Interest
                    The district court ruled, for good reason, that the
          methodology Mathias used to arrive at the $12,738,500 total
          valuation for the Anson assets was internally inconsistent and
          unreliable. First, on deposition in February 1996 Mathias had
          valued the Anson assets at only $10,238,000, roughly equal to the
          total indebtedness Anson owed Fleet. After Fleet moved for summary
          judgment, however, Mathias revised the valuation on Anson's assets
          upward by approximately $2.5 million 
                                                 well above the total Fleet
          indebtedness. Thus, the "moving target" nature of the valuation
          alone provided ample reason for the district court to scrutinize
          the Mathias methodology with special skepticism. Against this
          backdrop, therefore, the deferential standard of review looms as a
          very high hurdle for Peters. We turn now to the principal factors
          which accounted for the increased valuation. 
                    a.   Net Operating Losses
                    Mathias valued Anson's $5 million net operating loss
          ("NOL") at approximately $1,267,000. Of course, an NOL
                                         10

          "carryforward" may have potential value to the taxpayer (   viz.,
          Anson) if it can be used to offset future taxable income.
                                                                   Mathias
          conceded, however, that his inclusion of the NOL carryforward as an
          Anson asset was "inconsistent," since an NOL normally cannot be
          transferred, with certain exceptions inapplicable here ( e.g., a
          change in the ownership of a corporate taxpayer through qualified
          stock acquisitions). Thus, the Anson NOL carryforward would have
          been valueless to a third-party purchaser at foreclosure. 
                    Mathias, on the other hand, included the $1,267,000 NOL
          in tallying Anson assets on the theory that the Fleet foreclosure
          extinguished Anson's future right to utilize the NOL, thereby
          effectively "destroying" the asset. The Mathias thesis is beside
          the point, however, since the appraisal was designed to determine
          the value of Fleet's security  interest in Anson's assets at the
          date of foreclosure (
                              i.e., the value Fleet might reasonably expect
          to realize were the assets sold and applied to the Anson debt), 
                                                                        not
          the value of the NOL while Anson continued to function as a going
          concern. Thus, Mathias effectively conceded that the value of the
          Fleet security interest in the NOL was zero.
                    b.   Keyman Life Insurance Policy
                    Mathias proposed to testify that the keyman insurance
          policy Anson owned on the life of a former director was worth $1.2
          million. The valuation was derived from a Fleet document assessing
                              
               The Internal Revenue Code allows NOLs to be carried  back 3
          years, and forward 15 years.  See 26 U.S.C. S 172(b).
                                         11

          Fleet's collateral position, in which the $1.2 million figure
          reflected the 
                       net 
                           proceeds payable to the beneficiary (
                                                               i.e., Fleet)
          at the death of the insured.
                    The district court correctly concluded that the Mathias
          appraisal was patently inflated. As previously noted, the only
          material consideration, for present purposes, was the policy's
          value at the time Fleet   foreclosed  in October  1993, when the
          insured had a life expectancy of seven years and the cash value was
          only $62,000. At the very most, therefore, an arm's-length
          purchaser would have paid an amount equal to $1.2 million,
          discounted to present value. 
                    Indeed, pressed by the district court, Mathias conceded
          that he had not calculated "present value," but then estimated it
          at "somewhere in the vicinity of $800,000." Mathias likewise
          conceded that he had not taken into account the annual premium
          ($75,000) costs for maintaining the policy seven more years,
          totaling $525,000. Thus, Mathias effectively conceded that the
          policy might fetch only $275,000, some $925,000 below the proffered
          valuation. Absent any suggestion that accepted accounting
          principles would countenance such deficiencies, the district court
          acted well within its discretion in excluding the Mathias valua-
          tion.
                    As there has been no demonstration that the appraisal
          "rest[ed] on a reliable [methodological] foundation," 
                                                              Bogosian, 104
                              
               Although its face value was $1.5 million, the policy had been
          pledged to Fleet to secure a $300,000 loan. 
                                         12

          F.3d at 477, 479, with respect to the net operating losses and the
          keyman insurance policy, the most optimistic valuation to which
          Mathias supportably might have testified was $10,271,500, 
                                                                  see 
                                                                      supra
          Section II.A.2    $356,500 less than the total Anson indebtedness
          to Fleet    even assuming all other property values ascribed by
          Mathias were reasonably reliable, such as intangible assets (
                                                                      e.g.,
          goodwill, trade reputation, going-concern value, etc.) totaling
          $1,998,500, see Rev. Rul. 68-609, 1968-2 C.B. 327; the $2,648,000
          valuation given Anson's inventory; and the $2,941,000 real estate
          valuation.
          B.   The Rule 50(a) Judgments on Substantive Claims
               1.   Standard of Review
                    Judgments entered as a matter of law under Rule 50(a) are
          reviewed de novo, to determine whether the evidence, viewed most
          favorably to the nonmoving party, Peters, could support a rational
          jury verdict in its favor.  See Fed. R. Civ. P. 50(a); Coyante v.
          Puerto 
                 Rico 
                      Ports 
                             Auth., 105 F.3d 17, 21 (1st Cir. 1997). Of
          course, Peters was not entitled to prevail against the Rule 50(a)
          motion absent competent evidence amounting to "'more than a mere
          scintilla.'"  Id. (citation omitted).
               2.   The Peters Claims
                    The gravamen of the substantive claims for relief
          asserted by Peters is that Fleet colluded with Considine and
          Jacobsen to rid Anson of certain burdensome unsecured debt, thereby
          effecting a partial "private bankruptcy" discharge under the guise
          of the Fleet foreclosure, which advantaged Considine and Jacobsen
                                         13

          at the expense of Peters and other similarly situated Anson
          unsecured creditors. The Peters proffer included: (1) the March
          1993 decision by Fleet to declare Anson in default, which coincided
          with the Peters demand for payment from Anson on its sales commis-
          sions; (2) the August 1992 decision by Fleet to waive a default
          involving a shortfall much larger than the March 1993 default; (3)
          the 1993 negotiations with Fleet, in which Considine and Jacobsen
          made known their intention that C & J not assume the unsecured debt
          Anson owed Peters; (4) the decision to arrange a private foreclo-
          sure sale by Fleet, thus ensuring that C & J alone could "bid" on
          the Anson operating assets; and (5) the payments made to select
          unsecured Anson creditors (
                                    i.e., essential trade creditors) only. 
                    The district court ruled that Peters' failure to
          establish that Anson's assets were worth more than its total
          indebtedness to Fleet was fatal to all claims for relief. It noted
          that, as an unsecured creditor of Anson, Peters was simply experi-
          encing a fate common among unsecured creditors who lose out to a
          partially 
                   secured creditor (hereinafter: "undersecured creditor")
          which forecloses on their debtor's collateral. As the district
          court did not analyze the individual claims for relief, we now turn
          to that task. 
                    a.  Fraudulent Transfer Claims
                    Peters first contends that the jury reasonably could have
          found defendants' transfer of the Anson assets fraudulent under
          R.I. Gen. Laws SS 6-16-1 
                                  et 
                                     seq., which provides that a "transfer"
          is fraudulent if made "[w]ith actual intent to hinder, delay, or
                                         14

          defraud any creditor of the debtor."       Id. S 6-16-4(a)(1).
          Normally, it is a question of fact whether a transfer was made with
          actual intent to defraud. At least arguably, moreover, Peters
          adduced enough competent evidence to enable the jury to infer that
          defendants deliberately arranged a conveyance of the Anson assets
          with the specific intent to leave the Peters claim unsatisfied.
          Nonetheless, under the plain language of the Rhode Island statute,
          the actual intent of the defendants was immaterial as a matter of
          law.
                    The statute covers only a "[fraudulent] 
                                                           transfer made or
          obligation incurred by a debtor."     Id. S 6-16-4(a) (emphasis
          added). The term "transfer" is defined as "every mode, direct or
          indirect, absolute or conditional, voluntary or involuntary, of
          disposing of or parting with an asset or an interest in an asset,
          and includes payment of money, release, lease, and creation of a
          lien or other encumbrance."  Id. S 6-16-1(l). However, the term
                              
               The Rhode Island fraudulent transfer statute lists eleven
          "badges of fraud," from which a factfinder might infer actual
          fraudulent intent: "(1) The transfer or obligation was to an
          insider; (2) The debtor retained possession or control of the
          property transferred after the transfer; (3) The transfer or
          obligation was . . . concealed; (4) Before the transfer was made or
          [the] obligation was incurred, the debtor had been sued or
          threatened with suit; (5) The transfer was of substantially all the
          debtor's assets; (6) The debtor absconded; (7) The debtor removed
          or concealed assets; (8) The value of the consideration received by
          the debtor was [not] reasonably equivalent to the value of the
          asset transferred or the amount of the obligation incurred; (9) The
          debtor was insolvent or became insolvent shortly after the transfer
          was made or the obligation was incurred; (10) The transfer occurred
          shortly before or shortly after a substantial debt was incurred;
          and (11) The debtor transferred the essential assets of the
          business to a lienor who transferred the assets to an insider of
          the debtor." R.I. Gen Laws S 6-16-4(b).
                                         15

          "asset" "does not include . . . (1) Property to the extent it  is
          encumbered by a valid lien."  Id. 6-16-1(b) (emphasis added). As
          Fleet unquestionably held a valid security interest in all Anson
          assets, and Peters did not establish that their fair value exceeded
          the amount due Fleet under its security agreement,     see  supra
          Section II.A, the Anson property conveyed to C & J did not
          constitute an "asset" and no cognizable "transfer" occurred under
          section 6-16-4(a). See 
                                 also 
                                      Richman v. 
                                                Leiser, 465 N.E.2d 796, 798
          (Mass. App. Ct. 1984) ("A conveyance is not established as a
          fraudulent conveyance upon a showing of a fraudulent intention
          alone; there must also be a resulting diminution in the assets of
          the debtor available to [unsecured] creditors.").
                    b.   The Wrongful Foreclosure Claim and
                         Uniform Commercial Code ("UCC") S 9-504
                    Peters claimed that Fleet, in combination with the other
          defendants, conducted a "wrongful foreclosure" by utilizing its
          right of foreclosure as a subterfuge for effectuating Anson's
          fraudulent intention to avoid its lawful obligations to certain
          unsecured creditors. Thus, Peters contends, Fleet violated its
          duty to act in "good faith," 
                                      see R.I. Gen. Laws S 6A-1-203 ("Every
          contract or duty within title 6A imposes an obligation of good
          faith in its performance or enforcement."), thereby entitling
          Peters to tort damages. The "good faith" claim likewise fails.
                    As Peters adduced no competent evidence that Fleet
          concocted the March 1993  default by Anson, it demonstrated no
          trialworthy issue regarding whether Anson remained in default at
          the time the foreclosure took place in October 1993. Specifically,
                                         16

          Peters proffered no competent evidence to counter the well-
          supported ground relied upon by Fleet in declaring a default under
          the 1991 loan restructuring agreement; namely, that Anson failed to
          meet its earnings target for 1992. See 
                                                supra Section I. Nor is it
          material that Fleet had waived an earlier default by Peters in
          1992, particularly since Fleet at the time expressly reserved its
          right to act on any future default.  See id. Thus, Fleet's legal
          right to foreclose was essentially uncontroverted at trial.
                    The Peters argument therefore reduces to the proposition
          that a secured creditor, with an uncontested right to foreclose
          under the terms of a valid security agreement, nonetheless may be
          liable on a claim for wrongful foreclosure should a jury find that
          the secured creditor exercised its right based in part on a
          clandestine purpose unrelated to the default. 
                                                       But 
                                                           see 
                                                               Richman, 465
          N.E.2d at 799 ("To be a 'collusive foreclosure,' a foreclosure must
          be based on a fraudulent mortgage, or it must be irregularly
          conducted so as to claim a greater portion of the mortgagor's
          property than necessary to satisfy the mortgage obligation.")
          (citations omitted). Since Peters cites    and we have found 
                                                                         no
          Rhode Island case articulating the exact contours of a wrongful
          foreclosure claim by an unsecured creditor under R.I. Gen. Laws S
          6A-1-203, in the exercise of our diversity jurisdiction we are at
          liberty to predict the future course of Rhode Island law.     See
          Vanhaaren v. State 
                             Farm 
                                  Mut. 
                                       Auto. 
                                              Ins. 
                                                   Co., 989 F.2d 1, 3 (1st
          Cir. 1993). Nevertheless, having chosen the federal forum, Peters
          is not entitled to trailblazing initiatives under Rhode Island law.
                                         17

          See Carlton v. Worcester Ins. Co., 923 F.2d 1, 3 (1st Cir. 1991);
          Porter v. Nutter, 913 F.2d 37, 40-41 (1st Cir. 1990). Nor do its
          citations 
                      none purporting to apply Rhode Island law 
                                                                   persuade
          us that the Rhode Island courts would countenance the freewheeling
          "wrongful foreclosure" claim it advocates.
                              
               Tellingly, none of the cited cases involved a plaintiff who
          had prevailed without demonstrating actual prejudice; that is, that
          the secured creditor had neither a present contractual right to
          foreclose nor a comprehensive lien claim balance exceeding the
          value of the collateral. 
               We briefly note the more significant distinguishing features
          which make the cited authorities inapposite. First, in     Voest-
          Alpine Trading USA
                            v. 
                               Vantage Steel Corp.
                                                 , 732 F. Supp. 1315, 1324-
          25 (E.D. Pa. 1989), 
                             aff'd, 919 F.2d 206 (3d Cir. 1990), a foreclo-
          sure and resale were set aside,  not  as constituting a  wrongful
          foreclosure under  the common  law, but under the Pennsylvania
          Fraudulent Conveyance Act,  see Pa. Stat. Ann. tit. 39, S 357
          (repealed 1993). Moreover, whereas Peters failed to show that the
          Anson assets were even arguably worth more than the Anson indebted-
          ness to Fleet, see supra Section II.A., in  Voest-Alpine, 732 F.
          Supp. at 1322, 1325, where the collateral was worth "at least $1
          million" and the $1.5 million secured indebtedness was backed by
          personal guarantees of $300,000 as well, the district court
          concluded that the plaintiff had been "prejudiced" because it might
          have received partial payment had the debtor been forced into a
          chapter 7 liquidation or chapter 11 reorganization. 
               Second, in  Limor  
                                 Diamonds,  
                                            Inc. v.  D'Oro  
                                                            by  
                                                                Christopher
          Michael, Inc.
                      , 558 F. Supp. 709 (S.D.N.Y. 1983), the plaintiff, who
          had sold the debtor diamonds without obtaining a perfected purchase
          money security interest, sued both the debtor and a secured
          creditor which had foreclosed on the debtor's entire inventory,
          including the diamonds, as after-acquired property subject to its
          perfected security interest. The plaintiff alleged a conspiracy to
          convert the diamonds, on the ground that the defendants had induced
          the plaintiff to 
                          deliver the diamonds even as the secured creditor
          was poised to foreclose on any after-acquired collateral.  Id. at
          711-12. Thus, the species of bad faith alleged in      Limor was
          qualitatively different from any involved here, since Peters had
          supplied Anson with no goods or assets which could have become
          subject to the Fleet security interest. 
               Third, in Mechanics 
                                   Nat'l 
                                         Bank 
                                              of 
                                                 Worcester v. Killeen, 384
          N.E.2d 1231 (Mass. 1979), a "wrongful foreclosure" claim was upheld
          where no default had occurred.   Id. at 1235-36. In the instant
          case, of course, there is no suggestion that Peters was not in
          default under its loan restructuring agreement with Fleet. 
                                         18

                    Thus, the Peters contention that the jury would need to
          delve further into what motivated Fleet to exercise its legitimate
          contractual right to foreclose lacks significant foundation in the
          cited authorities.  See  also, e.g., E.A. 
                                                     Miller, 
                                                             Inc. v.  South
          Shore 
                Bank, 539 N.E.2d 519, 523 (Mass. 1989) ("The [UCC] defines
          '[g]ood faith' as 'honesty in fact in the conduct or transaction
          concerned[,]' [and] [t]he essence of bad faith, in this context, is
          not the [secured creditor's] state of mind but rather the attendant
          bad actions.") (citations omitted). Consequently, Peters is left
          to its argument that the Fleet decision to conduct a private
          foreclosure sale, rather than solicit potential competing buyers at
          a public sale, rendered the foreclosure sale "commercially
          unreasonable," in violation of the 
                                            objective "good faith" require-
          ment established in R.I. Gen. Laws S 6A-1-203. 
                                                        See, 
                                                             e.g., 
                                                                   American
          Sav. 
               &  
                 Loan 
                       Ass'n v.  Musick, 531 S.W.2d 581, 587 (Tex. 1975)
          (wrongful foreclosure involves irregularities in sale which
                              
               Finally, Peters relies on   Sheffield  
                                                     Progressive,  
                                                                   Inc. v.
          Kingston 
                   Tool 
                        Co., 405 N.E.2d 985 (Mass. App. Ct. 1980), which
          upheld a denial of a motion to dismiss a "collusive foreclosure"
          claim that collateral worth over $3 million had been sold in a
          private foreclosure sale for only $879,159, the 
                                                         full amount of the
          secured debt. Id. at 987. The decision was based not on a showing
          of subjective "bad faith" on the part of the secured creditor,
          however, but on an objective determination that if the allegations
          were proven true, it would mean that the debtor effectively would
          have "released," for no consideration, an unencumbered equity
          interest worth over $2 million otherwise available to unsecured
          creditors, id., clearly a commercially unreasonable sale.     See
          Thomas v. Price, 975 F.2d 231, 239 (5th Cir. 1992);     see  also
          Bezanson v. Fleet 
                            Bank 
                                 - 
                                   N.H., 29 F.3d 16, 20-21 (1st Cir. 1994)
          (affirming finding of commercial unreasonableness where secured
          creditor turned down purchase offer of $3.4 million, which would
          have left equity for other creditors). Peters, on the other hand,
          failed to prove that Anson had any equity in its operating assets
          when Fleet foreclosed.  See supra Section II.A. 
                                         19

          contributed to inadequate price).
                     Fleet maintained at trial that its decision to conduct
          a private sale was reasonable because the publicity attending a
          public sale would frighten off Tiffany's, Anson's principal client,
          thereby virtually assuring the failure of any successor company
          which acquired the Anson operating assets. Thus, Fleet plausibly
          reasoned that the anticipated publicity attending a nonprivate sale
          would tend to depress the sales price. Peters, on the other hand,
          failed to offer any evidence of commercial unreasonableness which
          dealt adequately with the justification relied upon by Fleet.
          Rather, Peters relied exclusively upon its proffer of testimony
          from Richard Clarke, a former banker who would have testified,
          categorically, that private foreclosure sales, at which the secured
          creditor solicits no third-party bids, are unreasonable per se.
                              
               Ultimately, commercial reasonableness poses a question of law,
          though its resolution often depends on an assessment of the
          constituent facts in dispute, such as the actual circumstances
          surrounding the particular sale (e.g., sales price, bid solicita-
          tion, etc.). See 
                           Dynalectron Corp.
                                             v. 
                                                Jack Richards Aircraft Co.
                                                                          ,
          337 F. Supp. 659, 663 (W.D. Okla. 1972). The factfinder must
          consider all aspects of the disposition, however, as no single
          factor, including the sales price, is dispositive.  See Bezanson,
          29 F.3d at 20 (N.H. law); RTC v. Carr, 13 F.3d 425, 430 (1st Cir.
          1993) (Mass. law). 
                Peters now suggests that the district court misunderstood and
          oversimplified the Clarke testimony, and that Clarke merely meant
          that most reasonable private sales would need to be promoted among
          interested third parties   if possible. We have reviewed the
          proffered Clarke testimony in its entirety, however, and find no
          sound basis for suggesting that the district court abused its
          discretion in concluding that it would have confused the jury. 
                                                                        See
          Bogosian, 104 F.3d at 476. In other words, as we see it, a sale in
          which third-party bids are actively solicited is not a "private"
          sale, at least absent considerations not apparent here. 
                                         20

                    Quite the contrary, however, under the Rhode Island UCC,
          private sales are expressly permitted.  See R.I. Gen. Laws 6A-9-
          504(3) (noting that "[d]isposition of the collateral may be by
          public or  private proceedings . . . but every aspect of the
          disposition including the method, manner, time, place, and terms
          must be commercially reasonable"). "A sale of collateral is not
          subject to closer scrutiny when the secured party chooses to
          dispose of the collateral through a private sale rather than a
          public sale. Indeed, the official comment to [UCC] section [9-504]
          indicates that private sale may be the preferred method of
          disposition. . . . The only restriction placed on the secured
          party's disposition is that it must be commercially reasonable."
          Thomas v. Price, 975 F.2d 231, 238 (5th Cir. 1992). In order to
          prove the private foreclosure sale commercially unreasonable,
          Peters would have had to demonstrate that the means employed by
          Fleet did not comport with prevailing trade practices among those
          engaged in the same or a comparable business,   see, e.g., In 
                                                                         re
          Frazier, 93 B.R. 366, 368 (Bankr. M.D. Tenn. 1988), 
                                                            aff'd, 110 B.R.
          827 (M.D. Tenn. 1989), whereas Clarke simply testified that    he
          invariably solicited bids in foreclosure sales. Clarke did not
          testify that the steps taken by Fleet, confronted in October 1993
          with the concern that Tiffany's might withdraw its indispensable
          jewelry orders, did not comport with reasonable private foreclosure
          practice in such circumstances. As to the latter point, Clarke
          simply stated that he did not know.
                    Furthermore, though Fleet may have foreclosed for any
                                         21

          number of subjective reasons, the record indisputably discloses
          that it had at least one unimpeachable reason: the uncontested
          Anson default under the 1991 loan restructuring agreement.
          Consequently, we are not persuaded that the Rhode Island courts
          would accept the amorphous "wrongful foreclosure" claim advocated
          by Peters in the present circumstances.  See Carlton, 923 F.2d at
          3. Accordingly, the wrongful foreclosure claim was properly
          dismissed.
                    c.   Bulk Transfer Act (UCC S 6-102(1),(2)) 
                    Peters alleged that the sale of all Anson operating
          assets to C & J constituted a "bulk transfer" under the Rhode
          Island Bulk Transfer Act, see R.I. Gen. Laws SS 6A-6-101, et seq.
          ("BTA"),  and that the admitted failure to give prior notification
          to other Anson creditors violated the BTA notice provision, thus
          entitling Peters to treat the entire transfer as "ineffective," 
                                                                        id.
          S 6A-6-105. Defendants counter that the asset sale fell within an
          express BTA exemption because it was nothing more than a
          "[t]ransfer[] in settlement or realization of a lien or other
                              
                Of course, were Fleet found to have foreclosed on the Anson
          assets solely to assist Considine and Jacobsen in defrauding
          certain of Anson's unsecured creditors, the foreclosure could prove
          less fruitful than Fleet supposed.  See infra Section II.B.2(d).
          But that is an entirely different question than whether Fleet would
          be liable in tort under Rhode Island law.
                A "bulk transfer" is "any transfer in bulk and not in the
          ordinary course of the transferor's business of a major part of the
          materials, supplies, merchandise, or other inventory, . . . [as
          well as] a substantial part of the equipment . . . if made in
          connection with a bulk transfer of inventory." Id. S 6A-6-102(1),
          (2).
                                         22

          security interests [ viz., Fleet's   undersecured claim against
          Anson]." Id. S 6A-6-103(3); 
                                      cf. 
                                          supra Section II.B.2(a) (compara-
          ble "lien" exception under fraudulent transfer statute).
                    Parry for thrust, relying on 
                                               Starman v. 
                                                          John Wolfe, Inc.
                                                                          ,
          490 S.W.2d 377 (Mo. Ct. App. 1973), Peters argues that defendants
          are not entitled to claim the "lien" exemption under S
          6A-6-103(3).  Peters contends,   inter alia, that the first and
          third prongs in the 
                             Starman test were not met here. It argues that
          though Fleet declared a loan default in March 1993, its loan
          officers conceded at trial that Fleet had waived more serious
          defaults in the recent past and that it had not reassessed whether
          Anson was still in default in October 1993, 
                                                    i.e., at the time Fleet
          foreclosed. Second, some of the purchase monies C & J paid for the
          Anson assets were not applied to Fleet's secured claim against
          Anson. For example, Fleet increased the purchase price for Anson's
          assets to cover approximately $322,000 in outstanding checks, drawn
                              
                In Starman, an automobile dealership owed approximately
          $60,000 to a bank, which held a security interest in all dealership
          assets, and owed plaintiff Starman a $3,300 unsecured debt. On its
          own initiative, the dealership sold its entire business for $74,000
          to third parties, who directly paid the bank's security interest in
          full, then paid over the remaining $14,000 to two other creditors
          of the dealership. The court held that a transferee must make
          three factual showings to qualify for the "lien" exemption under
          BTA S 103(3): (1) the transferor defaulted on a secured debt, and
          its secured creditor had a present right to foreclose on the
          transferor's assets to satisfy its lien; (2) the transferor
          conveyed the collateral 
                                 directly to the secured party, rather than
          a third party; 
                        and (3) the secured party applied 
                                                          all sale proceeds
          to the transferor's debt, rather than remitting part of the
          proceeds preferentially to some (but less than all) of the
          transferor's other unsecured creditors. 
                                                 See 
                                                     Starman, 490 S.W.2d at
          382-83. The Missouri court found that the transferor and
          transferees had satisfied none of these criteria.  Id.
                                         23

          on Anson's checking account with Fleet and made payable to Anson's
          trade creditors. Further, as a term of the asset sale, Fleet
          funnelled half a million dollars in "new capital" back into the
          newly created business entity, which C & J then used to pay off
          certain trade debts it had assumed from Anson. Both transactions
          violated Starman's third     or anti-preference      prong, says
          Peters, because some, but not all, Anson unsecured creditors were
          paid with cash not used to reduce or extinguish the $10,628,000
          Fleet debt. We cannot agree.
                    Starman poses no bar to defendants' "lien" exemption
          claim under U.C.C. S 6A-6-103(3). First, as we have noted,    see
          supra Section II.B.2(b), Fleet declared the loan default in March
          1993 because Anson had failed to achieve its earnings target for
          1992. Thus, the very nature of the default meant that it could not
          be cured at any time after December 31, 1992, by which time 1992
          year-end earnings were a fait accompli. Under the terms of the
          loan restructuring agreement, therefore, Fleet had the unilateral
          right to foreclose on the collateral. Furthermore, the previous
          Fleet waivers of default were immaterial to the question whether
          Fleet had a right to foreclose in October 1993, as the default it
          expressly declared in March 1993 was never waived. 
                    Second, the circumstances surrounding the Peters claim
          remove it from under the third 
                                        Starman prong.  In  Starman, and in
                              
                We hasten to add, however, that Fleet incorrectly suggests
          that the Missouri Court of Appeals later "negated" its    Starman
          holding in Techsonic Indus., Inc. v. Barney's Bassin' Shop, Inc.,
          621 S.W.2d 332 (Mo. Ct. App. 1981). Rather,  Techsonic jettisoned
                                         24

          later cases applying its third prong,    see,  e.g.,  Mid-America
          Indus., 
                  Inc. v. Ketchie, 767 P.2d 416, 418-19 (Okla. 1989), the
          sale proceeds were more than sufficient to satisfy the secured
          claim in full, leaving excess proceeds. The BTA is designed to
          prevent transferors 
                                like Anson 
                                              from liquidating their assets
          without notice to their creditors, and retaining the proceeds.
          Here, however, the sale price paid by C & J did not exceed the
          amount due Fleet on its secured claim, 
                                                see 
                                                    supra Section II.A, and
          Fleet therefore was entitled to apply the entire purchase price
          toward the Anson indebtedness. That Fleet chose to devote a
          portion of the sale proceeds to certain Anson trade creditors did
          not implicate Starman's third prong since those monies were never
                              
          only the second prong in the Starman test. A transferee would be
          exempt from the BTA even if the transferor conveyed the bulk assets
          to a third party, rather than to its secured creditor, so long as
          all sale proceeds were applied to the secured debt. The court
          rejected the proposition that the BTA requires the secured creditor
          and transferee to proceed with the empty formalities of a bifurcat-
          ed transfer (i.e., passing the assets from transferor to secured
          creditor, from secured creditor to third-party transferee) in order
          to claim the "lien exemption." Importantly, however, the 
                                                                  Techsonic
          defendants had applied all sale proceeds to the secured debt, see
          id. at 334 ("[A]ll proceeds went to the bank."), and the 
                                                                  Techsonic
          court therefore had no occasion to reconsider    Starman's third
          "anti-preference" criterion. Further, other courts have since
          acknowledged the continuing efficacy of the third prong in 
                                                                   Starman.
          See, 
              e.g., 
                    Mid-America Indus., Inc.
                                             v. 
                                                Ketchie, 767 P.2d 416, 418-
          19 (Okla. 1989) (transfer not exempt where "only a portion of the
          proceeds of the sale was paid to the secured creditor"); see also
          Ouachita Elec. Coop. Corp.
                                    v. 
                                       Evans-St. Clair
                                                     , 672 S.W.2d 660, 176-
          77 (Ark. Ct. App. 1984) (finding transfer exempt where all proceeds
          were applied to secured debts, but expressly distinguishing 
                                                                    Starman
          on ground that defendants had not applied all sales proceeds to
          secured debt); Schlussel v. Emmanuel 
                                               Roth 
                                                    Co., 637 A.2d 944, 955
          n.5 (N.J. Super. Ct. App. Div. 1994) (in dicta, endorsing 
                                                                  Starman's
          partial-proceeds rule);   American  
                                               Metal  
                                                      Finishers,  
                                                                  Inc. v.
          Palleschi, 391 N.Y.S.2d 170, 173 (App. Div. 1977) (same); 
                                                                   Peerless
          Packing 
                  Co. v. Malone 
                                & 
                                  Hyde, 
                                         Inc., 376 S.E.2d 161, 164 (W. Va.
          1988).
                                         25

          "excess" proceeds. Thus, the district court properly dismissed the
          BTA claim.
                    d.   Successor Liability
                    Next, Peters invokes the "successor liability" doctrine,
          by contending that C & J is simply Anson reorganized in another
          guise, and therefore answerable in equity for Anson's outstanding
          liabilities, including the $859,068 debt due Peters in sales
          commissions. See 
                           H.J. Baker & Bro.
                                             v. 
                                               Orgonics, Inc.
                                                             , 554 A.2d 196
          (R.I. 1989).
                    Under the common law, of course, a corporation normally
          may acquire another corporation's assets without becoming liable
          for the divesting corporation's debts.  See id. at 205; see  also
          National Gypsum Co.
                             v. 
                                Continental Brands Corp.
                                                        , 895 F. Supp. 328,
          333 (D. Mass. 1995); 15 William M. Fletcher, 
                                                     Fletcher Cyclopedia of
          Law 
              of 
                 Private 
                         Corporations S 7122, at 231 (1991) [hereinafter:
          "Fletcher"]. But since a rigid nonassumption rule can be bent to
          evade valid claims, the successor liability doctrine was devised to
          safeguard disadvantaged creditors of a divesting corporation in
          four circumstances. An acquiring corporation may become liable
          under the successor liability doctrine for the divesting
          corporation's outstanding liabilities if: (1) it expressly or
          impliedly assumed the divesting entity's debts; (2) the parties
          structured the asset divestiture to effect a 
                                                     de 
                                                        facto merger of the
          two corporations; (3) the divesting corporation transferred its
          assets with actual fraudulent intent to avoid, hinder, or delay its
          creditors; or (4) the acquiring corporation is a "mere continua-
                                         26

          tion" of the divesting corporation.  See H.J. 
                                                        Baker, 554 A.2d at
          205 (citing, with approval, "mere continuation" test set forth in
          Jackson v. 
                    Diamond T. Trucking Co.
                                           , 241 A.2d 471, 477 (N.J. Super.
          Ct. Law Div. 1968) (recognizing, as distinct exceptions, both the
          "actual fraud" and "mere continuation" tests)); Cranston 
                                                                    Dressed
          Meat 
               Co. v. Packers 
                              Outlet 
                                     Co., 57 R.I. 345, 348 (1937) (noting
          that nonassumption rule applies only "in the absence of fraud");
          see also Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182 n.5
          (1973); 
                 Western Auto Supply Co.
                                         v. 
                                            Savage Arms, Inc.
                                                              (
                                                               In re Savage
          Indus., Inc.), 43 F.3d 714, 717 n.4 (1st Cir. 1994); Philadelphia
          Elec. Co. v. Hercules, Inc., 762 F.2d 303, 308-09 (3d Cir. 1985);
          Fletcher, at S 7122. This case implicates the third and fourth
          successor liability tests. 
                    The district court dismissed the instant successor
          liability claim on the ground that Peters could not have been
          prejudiced, because Fleet had a legitimate right to foreclose and
          Peters did not prove the Anson assets were worth more than the
          total Anson indebtedness to Fleet. On appeal, C & J takes
          essentially the same position, but with the flourish that the
          successor liability doctrine is inapplicable   per  se where the
          divesting corporation's assets were acquired pursuant to an
          intervening foreclosure, rather than a direct purchase.  See R.I.
          Gen. Laws S 6A-9-504(4) ("When collateral is disposed of by a
          secured party after default, the disposition transfers to a
          purchaser for value all of the debtor's rights therein and
          discharges the security interest under which it is made and any
                                         27

          security interest or lien subordinate thereto. The purchaser takes
          free of all such rights and interests . . . .") (emphasis added).
          We do not agree.
                    First and foremost, existing case law overwhelmingly
          confirms that an intervening foreclosure sale affords an acquiring
          corporation no automatic exemption from successor liability. See,
          e.g., 
               Glynwed, Inc.
                             v. 
                                Plastimatic, Inc.
                                                 , 869 F. Supp. 265, 273-75
          (D.N.J. 1994) (collecting cases); Asher v.  KCS 
                                                          Int'l, 
                                                                 Inc., 659
          So.2d 598, 600 (Ala. 1995);  G.P. 
                                            Publications, 
                                                          Inc. v.  Quebecor
          Printing-St. 
                       Paul, 
                             Inc., 481 S.E.2d 674, 679-80 (N.C. Ct. App.
          1997); 
                see 
                    also 
                         Upholsterers' Int'l Union Pension Fund
                                                                v. 
                                                                   Artistic
          Furniture 
                    of 
                       Pontiac, 920 F.2d 1323, 1325, 1327 (7th Cir. 1990).
          Nor has C & J cited authority supporting its position. 
                    Second, by its very nature the foreclosure process cannot
          preempt the successor liability inquiry. Whereas liens relate to
          assets (viz., collateral), the indebtedness underlying the lien
          appertains to a person or legal entity (viz., the debtor). Thus,
          although foreclosure by a senior lienor often wipes out junior-lien
          interests in the same collateral,   see, e.g.,  Levenson v.  G.E.
          Capital 
                  Mortgage 
                           Servs., 
                                   Inc., 643 A.2d 505, 512 (Md. Ct. Spec.
          App. 1994), rev'd on other grounds, 657 A.2d 1170 (Md. 1995), it
          does not discharge the debtor's underlying obligation to junior
          lien creditors. See, 
                               e.g., 
                                    Trustees of MacIntosh Condominium Ass'n
          v. 
            FDIC, 908 F. Supp. 58, 64 (D. Mass. 1995) ("'As a result of the
          first mortgage foreclosure the second mortgage lien was extin-
          guished but not the second mortgage debt.'") (quoting Osborne v.
                                         28

          Burke, 300 N.E.2d 450, 451 (Mass. App. Ct. 1973)). As one might
          expect, therefore, UCC S 9-504 focuses exclusively on the effect a
          foreclosure sale has upon subordinate liens, see R.I. Gen. Laws S
          6A-9-504(4), 
                      supra, rather than any extinguishment of the underly-
          ing indebtedness. Whereas the successor liability doctrine focuses
          exclusively on debt extinguishment, be the debt secured or unse-
          cured.  
                    Following the October 1993 foreclosure sale by Fleet, the
          then-defunct Anson unquestionably remained legally obligated to
          Peters for its sales commissions, even if the lack of corporate
          wherewithal rendered the obligation unenforceable as a practical
          matter. True, Fleet might have sold the Anson assets to an entity
          with no ties to Anson, but that is beside the point, since the
          Peters successor liability claim alleges that C & J  is Anson in
          disguise. As Peters simply seeks an equitable determination that
          C & J, as Anson's successor, is liable for the sales commissions
                              
                It is for this reason that the successor liability doctrine
          often proves problematic in bankruptcy proceedings. In contrast to
          UCC S 9-504, the Bankruptcy Code expressly permits sales free and
          clear of liens, and  of any other " interest" in the collateral.
          See, e.g., 11 U.S.C. S 363(f) ("The trustee may sell property . .
          . free and clear of   any interest in such property . . . .")
          (emphasis added); S 727 (discharge in liquidation); S
          1141(d)(discharge in reorganization). Thus, arguably at least,
          such "interest[s]" might be thought to encompass successor
          liability claims by unsecured creditors. But 
                                                       see, 
                                                            e.g., 
                                                                  Wilkerson
          v. 
            C.O. Porter Mach. Co.
                                 , 567 A.2d 598, 601-02 (N.J. Super. Ct. Law
          Div. 1989) (finding successor liability doctrine applicable
          notwithstanding entry of S 363 order). Unlike a bankruptcy court,
          however, a secured creditor and its nonbankrupt debtor lack the
          power    either at common law or by statute         to effect a
          discharge of underlying third-party debts, even for the most
          beneficent of reasons.
                                         29

          Peters earned from Anson, 
                                   see 
                                       Glynwed, 869 F. Supp. at 274-75, its
          claim in no sense implicates any lien interest in any former Anson
          asset.    Third, successor liability is an equitable doctrine, both
          in origin and nature.  See, e.g., Chicago 
                                                    Truck 
                                                          Drivers, 
                                                                    Helpers
          and 
              Warehouse 
                        Workers 
                                 Union 
                                       (Indep.) 
                                                Pension 
                                                         Fund v.  Tasemkin,
          Inc., 59 F.3d 48, 49 (7th Cir. 1995); 
                                              The Ninth Ave. Remedial Group
          v. Allis-Chalmers Corp., 195 B.R. 716, 727 (N.D. Ind. 1996) ("The
          successor doctrine is derived from equitable principles . . . .");
          Stevens v. McLouth 
                             Steel 
                                   Prods. 
                                          Corp., 446 N.W.2d 95, 100 (Mich.
          1989); Uni-Com 
                         N.W., 
                               Ltd. v. Argus 
                                             Publ'g 
                                                    Co., 737 P.2d 304, 314
          (Wash. Ct. App. 1987). Moreover, the UCC, as adopted in Rhode
          Island, see R.I. Gen. Laws S 6A-9-103, provides that generally
          applicable principles of equity, unless expressly preempted, are to
          supplement its provisions.  See G.P. 
                                               Publications, 481 S.E.2d at
          680; see also Ninth 
                              Dist. 
                                    Prod. 
                                          Credit 
                                                 Ass'n v. Ed 
                                                             Duggan, 
                                                                      Inc.,
          821 P.2d 788, 794 (Colo. 1991) (en banc);     see also  Sheffield
          Progressive, Inc.
                           v. 
                              Kingston Tool Co.
                                               , 405 N.E.2d 985, 988 (Mass.
          App. Ct. 1980) (UCC Article 9 does not preempt Uniform Fraudulent
          Conveyance Act). Moreover, R.I. Gen. Laws S 6A-9-504 neither
          explicitly nor impliedly preempts the successor liability doctrine.
                    Finally, the fact that C & J acquired the Anson assets
          indirectly through Fleet, rather than in a direct sale from Anson,
          does not trump the successor liability doctrine as a matter of law,
          since equity is loath to elevate the form of the transfer over its
          substance, and deigns to inquire into its true nature.        See
          Glynwed, 869 F. Supp. at 275 (collecting cases); 
                                                         G.P. Publications
                                                                          ,
                                         30

          481 S.E.2d at 679-80; see  also Bangor 
                                                 Punta 
                                                       Operations, 
                                                                   Inc. v.
          Bangor 
                 & 
                   Aroostook 
                              R. 
                                 Co., 417 U.S. 703, 713 (1974) ("In such
          cases, courts of equity, piercing all fictions and disguises, will
          deal with the substance of the action and not blindly adhere to the
          corporate form."); Young v. Higbee 
                                             Co., 324 U.S. 204, 209 (1945)
          (same); Henry 
                        F. 
                            Mitchell,  
                                      Co. v.  Fitzgerald, 231 N.E.2d 373,
          375-76 (Mass. 1967) (same). Thus, were C & J otherwise qualified
          as Anson's "successor" under Rhode Island law, because its
          principals acted with intent to evade the Peters claim, 
                                                                 see 
                                                                     infra,
          there would be no equitable basis for treating the asset transfer
          by foreclosure differently than a direct transfer from Anson to C
          & J.  See A.R. Teeters 
                                 & 
                                   Assocs., 
                                            Inc. v. Eastman 
                                                            Kodak 
                                                                  Co., 836
          P.2d 1034, 1039 (Ariz. Ct. App. 1992) ("Successor liability is
          based upon the theory 'that the assets of a private corporation
          constitute a trust fund for the benefit of its creditors . . . .'")
          (citation omitted). Consequently, we reject the contention that C
          & J's acquisition of Anson's assets through the Fleet foreclosure
          pursuant to R.I. Gen. Laws S 6A-9-504, warranted dismissal of the
          successor liability claim as a matter of law. 
                    Thus, Peters was entitled to attempt to prove that C & J,
          as Anson's "successor," became liable for the Anson debt to Peters
          because C & J is a "mere continuation" of the divesting corporate
          entity.  See Nissen Corp. v. Miller, 594 A.2d 564, 566 (Md. 1991)
          ("'The [mere continuation] exception is designed to prevent a
          situation whereby the specific purpose of acquiring assets is to
          place those assets out of reach of the predecessor's creditors. In
                                         31

          other words, the purchasing corporation maintains the same or
          similar management and ownership but wears a "new hat."'")
          (citation omitted). The "mere continuation" determination turns
          upon factfinding inquiries into five emblematic circumstances: (1)
          a corporation transfers its assets; (2) the acquiring corporation
          pays "less than adequate consideration" for the assets; (3) the
          acquiring corporation "continues the [divesting corporation's]
          business"; (4) both corporations share "at least one common officer
          who [was] instrumental in the transfer"; and (5) the divesting
          corporation is left "incapable of paying its creditors." See H.J.
          Baker, 554 A.2d at 205 (adopting, 
                                          inter 
                                                alia, the factors set forth
          in Jackson, 241 A.2d at 477). 
                    C & J relies heavily, indeed almost exclusively, on 
                                                                      Casey
          v. 
            San-Lee Realty, Inc.
                                , 623 A.2d 16 (R.I. 1993), wherein the Rhode
          Island Supreme Court identified five factual considerations which
          contradicted the contention that San-Lee Realty was a "successor"
          corporation.   Id. C &amp; J then argues that all five factual
          considerations in  Casey appertain here. By disregarding the
          distinctive procedural posture in which the 
                                                     Casey appeal presented
          itself, however, C & J fundamentally misdirects its reliance.
                    Unlike the judgment as a matter of law at issue here, the
          Casey court affirmed a judgment entered for the defendants
          following a bench trial in which the trial judge made factual
          findings directly pertinent to the "mere continuation" theory. 
                                                                        See
          id. at 19 ("The findings of fact made by a trial justice, sitting
          without a jury, are to be given great weight."). Thus,      Casey
                                         32

          provides no support for the proposition that the particular factual
          considerations credited by the trial court, qua factfinder, would
          permit a trial court, sitting with a jury, to enter judgment as a
          matter of law. 
                    We emphasize the misplaced reliance on Casey because it
          points up the fundamental flaw underlying the Rule 50 dismissal
          below. The   Baker court was careful to note that the "mere
          continuation" inquiry is multifaceted, and normally requires a
          cumulative, case-by-case assessment of the evidence by the
          factfinder.  See H.J. 
                                Baker, 554 A.2d at 205;  see also  Cranston
          Dressed 
                  Meat, 57 R.I. at 350 (affirming judgment for plaintiff
          based on findings of fact); Steel 
                                            Co. v. Morgan 
                                                          Marshall 
                                                                    Indus.,
          Inc., 662 N.E.2d 595, 600-01 (Ill. App. Ct. 1996) (trialworthy
          issue of fact precluded directed verdict);      Burgos v.   Pulse
          Combustion, Inc.
                         , 642 N.Y.S.2d 882, 882-83 (App. Div. 1996); 
                                                                     Bryant
          v. Adams, 448 S.E.2d 832, 839-40 (N.C. Ct. App. 1994) ("mere
          continuation" inquiry implicates issues of fact precluding summary
          judgment); Bagin v. IRC Fibers Co., 593 N.E.2d 405, 408 (Ohio Ct.
          App. 1991) (genuine issue of fact relating to "mere continuation"
          inquiry precluded summary judgment for defendant); 
                                                           cf. 
                                                               Dickinson v.
          Ronwin, 935 S.W.2d 358, 364 (Mo. Ct. App. 1996) ("Although none of
          the badges of fraud existing alone establishes fraud, a concurrence
          of several of them raises a presumption of fraud.").
                    Thus, although a Rule 50 dismissal may be warranted where
          the trial court has determined the evidence insufficient to permit
          a rational jury to find for the plaintiff, we are not presented
                                         33

          with such a case. Rather, viewed in the light most favorable to
          Peters, see Fed. R. Civ. P. 50(a);  Coyante, 105 F.3d at 21, its
          evidentiary proffer generated a trialworthy issue of material fact
          respecting all five factual inquiries identified in 
                                                             H.J. Baker
                                                                       , as
          we shall see.
                         (i)  "Transfer" of Assets
                    Anson transferred all its   operating  assets, thereby
          enabling C & J to continue the identical product line without
          interruption.  H.J. 
                              Baker, 554 A.2d at 205. C & J nonetheless
          contends that a cognizable "transfer" could not have occurred,
          because Anson did not convey all its assets to C & J; that is, it
          conveyed its real property to Little Bay Realty.  See Casey, 623
          A.2d at 19 (finding no transfer where,     inter  alia, not all
          corporate assets were conveyed). We disagree.
                    Under the first 
                                   Baker criterion, the plaintiff need only
          demonstrate "a transfer of corporate assets." 
                                                       H.J. Baker
                                                                 , 554 A.2d
          at 205. That is, it is not necessary, as a matter of law, that a
          single corporation acquire all the divesting corporation's assets,
          though the relative inclusiveness of any such asset transfer may
                              
                Since the district court judgment must be vacated in any
          event, we assume  arguendo that Rhode Island law would require
          Peters to make adequate showings on all five Baker factors, even
          though Baker expressly adopted the New Jersey model for the "mere
          continuation" test, under which "[n]ot all of these factors need be
          present for a de facto merger or continuation to have occurred."
          Luxliner P.L. Export, Co.
                                   v. 
                                      RDI/Luxliner, Inc.
                                                       , 13 F.3d 69, 73 (3d
          Cir. 1993) (citing Good v. Lackawanna 
                                                Leather 
                                                        Co., 233 A.2d 201,
          208 (N.J. Super. Ct. 1967)). Indeed, the  Baker court itself did
          not even discuss the "inadequate consideration" element in arriving
          at its determination that the acquiring company qualified as a
          "successor."  See H.J. Baker, 554 A.2d at 205.
                                         34

          prove to be a very pertinent factual consideration which the
          factfinder would take into account in the 
                                                   overall mix.  Cf. 
                                                                     Casey,
          623 A.2d at 19 (noting that divesting corporation conveyed only
          three-fifths of its assets). In this respect,  Baker accords with
          the law in other jurisdictions. 
                                         See, 
                                              e.g.,  G.P. Publications
                                                                      , 481
          S.E.2d at 679 (successor liability doctrine concerns "the pur-
          chase[] of all or 
                           substantially 
                                         all the assets of a corporation");
          cf. Dickinson, 935 S.W.2d at 364 (recognizing, as badge of fraud,
          "the transfer of all or   nearly all of the debtor's property")
          (emphasis added); supra note 7. 
                    Yet more importantly, however, this is not an instance in
          which the divesting corporation transferred its real estate to a
          third corporation which was beyond the  de  facto control of the
          principals of the corporation which acquired the operating assets.
          Considine and Jacobsen deliberately structured the overall
          transaction so as to keep the Anson operating assets and real
          property under the ownership of two separate entities, C & J and
          Little Bay Realty respectively, concurrently established and
          controlled by them. Once again, therefore, since the successor
          liability doctrine is equitable in nature, it is the substance of
          the overall transaction which controls, rather than its form. See
          Glynwed, 869 F. Supp. at 275. Thus, the fact that C & J leased the
          real property from Little Bay is not controlling, since C & J
                              
                Rather, the ostensible purpose was to immunize Little Bay
          from a possible C 
                             & 
                               J failure, which likewise explains why the
          October 1993 agreement contemplated no cross-collateralization. 
                                         35

          (through Considine and Jacobsen) retained de facto control of the
          former Anson real estate following its transfer to Little Bay.
          See, 
              e.g.,  H.J. Baker
                               , 554 A.2d at 205 (focusing on fact that two
          companies "operated from the same manufacturing plant," not on
          whether they both owned the premises). Accordingly, viewing the
          evidence in the light most favorable to Peters, we cannot conclude,
          as a matter of law, that no cognizable "transfer" occurred. 
                         (ii) "Inadequate Consideration"
                    Peters likewise adduced sufficient evidence from which a
          rational jury could conclude that the operating assets were
          transferred to C & J for "inadequate consideration."    Id. The
          second Baker factor rests on the theory that inadequate consider-
          ation is competent circumstantial evidence from which the
          factfinder reasonably may infer that the transferor harbored a
          fraudulent intent to evade its obligations to creditors.     See,
          e.g., Ricardo 
                        Cruz 
                             Distribs., 
                                        Inc. v.  Pace 
                                                      Setter, 
                                                              Inc., 931 F.
          Supp. 106, 110 (D.P.R. 1996) ("a fraudulent transfer of property
          from the seller to the buyer, evinced by inadequate consideration
          for the transfer"); Casey Nat'l Bank v. Roan, 668 N.E.2d 608, 611
          (Ill. App. Ct.) ("Proof of fraud in fact requires a showing of an
          actual intent to hinder creditors, while fraud in law presumes a
          fraudulent intent when a voluntary transfer is made for no or
          inadequate consideration and directly impairs the rights of
          creditors."), 
                       appeal 
                              denied, 675 N.E.2d 631 (1996); 
                                                             cf. 
                                                                 Dickinson,
          935 S.W.2d at 364 (recognizing "inadequacy of consideration" as
          badge of fraud);  supra note 7. On the other hand, a valuable
                                         36

          consideration negotiated at arm's-length between two distinct
          corporate entities normally is presumed "adequate," particularly if
          the divesting corporation's creditors can continue to look to the
          divesting corporation and/or the sales proceeds for satisfaction of
          their claims.  See A.R. 
                                  Teeters, 836 P.2d at 1040; see also  Arch
          Mineral Corp. v. Babbitt, 894 F. Supp. 974, 986 n.11 (S.D. W. Va.
          1995) (one inquiry is whether divesting corporation       retains
          sufficient assets from which to satisfy creditor claims),  aff'd,
          104 F.3d 660 (1997); 
                              Eagle Pac. Ins. Co.
                                                 v. 
                                                    Christensen Motor Yacht
          Corp., 934 P.2d 715, 721 (Wash. Ct. App. 1997) (inquiring whether
          divesting corporation is "left unable to respond to [the]
          creditor's claims").
                    The total consideration for all Anson assets in this case
          was less than $500,000. Fleet effectively wrote off its outstand-
          ing balances ($10,628,000) on the Anson loan in 1993, and provided
          C & J and Little Bay Realty "new" financing totaling approximately
          $2.9 million.   See Fleet Credit Memo (10/14/93), at 4 ("This
          [agreement] is to involve forgiveness of some of [Fleet's] legal
          balance in conjunction with a significant equity injection.")
          (emphasis added). Thus, though normally loans obtained by buyers
          to finance asset acquisitions would be considered in calculating
          the total consideration paid, here the two newly-formed acquiring
                              
                Because the conveyances to C & J and Little Bay allegedly
          comprised part of an integrated scheme to defraud certain Anson
          creditors, we weigh the total consideration involved in both
          transactions. Our conclusion would be precisely the same, however,
          were we to consider only the operating-assets sale to C & J.
                                         37

          companies actually incurred no "new" indebtedness to Fleet. In
          fact, if the two companies were determined to be Anson's "succes-
          sors," the asset sale would have gained them loan forgiveness
          approximating $7.728 million (
                                       i.e., $10,628,000, less new indebted-
          ness of only $2.9 million), given their total exoneration from
          Anson's preexisting indebtedness to Fleet. Since the "new" Fleet
          loans cannot count as "consideration," at least as a matter of law,
          C & J and Little Bay paid a combined total of only $1 million in
          additional cash consideration for the Anson operating assets and
          real estate, of which $550,000 was immediately reinjected into the
          two acquiring companies for capital improvements and debt service.
          See supra Section I. As a practical matter, therefore, C & J and
          Little Bay acquired all the Anson assets for only $450,000.  
                    Although Peters utterly failed to demonstrate that the
          Anson assets were worth as much as $12,738,000, see supra Section
          II.A., it nevertheless adduced competent evidence as to their
          minimum value. Thus, the trial record would support a rational
          inference that the assets transferred by Anson had a fair value of
          just under $4 million. Fleet documents indicate that the book
                              
                The district court implied that the fact that Considine and
          Jacobsen injected new capital into the two acquiring companies was
          dispositive of the "mere continuation" inquiry. We cannot agree,
          however, that an injection of new capital at these minimal levels
          precluded a finding of fraudulent intent as a matter of law.
          Rather, assuming the reconfigured business were to escape,  inter
          alia, the $859,068 debt due Peters, the $450,000 invested by
          Considine and Jacobsen could be considered quite a bargain.
          Finally, the remaining $550,000 in new capital was directed back
          into the C & J and Little Bay coffers, where it served as an
          immediate benefit to Considine and Jacobsen, not a detriment.
                                         38

          value of the operating assets approximated $5.2 million; Fleet's
          conservative estimate of their value approximated $2.11 million;
          and its conservative valuation of the real property was $1.78
          million. Therefore, with a total 
                                          minimum asset value just under $4
          million, and a de facto purchase price below $500,000, a rational
          jury could conclude that C & J and Little Bay acquired the Anson
          assets at 12.5 cents on the dollar.
                    At these minimal levels, adequacy of consideration
          presents an issue for the factfinder.  See Nisenzon v.  Sadowski,
          689 A.2d 1037, 1042-43 (R.I. 1997) (under R.I. fraud conveyance
          statute, adequacy of consideration is for factfinder, and review-
          able only for clear error); see  also Pacific 
                                                        Gas 
                                                            & 
                                                              Elec. 
                                                                    Co. v.
          Hacienda Mobile Home Park, 119 Cal. Rptr. 559, 566 (Cal. Ct. App.
          1975) ("Adequacy of consideration is a question of fact to be
          determined by the trier of fact.");  Gaudio v.  Gaudio, 580 A.2d
          1212, 1221 (Conn. App. Ct. 1990) ("[T]he adequacy of the consider-
          ation in an action to set aside a fraudulent conveyance is an issue
          of fact."); 
                     Textron Fin. Corp.
                                        v. 
                                          Kruger, 545 N.W.2d 880, 884 (Iowa
          Ct. App. 1996) ("We refrain, however, from adopting any mathemati-
          cal rules to determine the adequacy of consideration. All the
          facts and circumstances of each case must be considered."). On the
          present record, therefore, it was error to determine as a matter of
          law that no rational factfinder could conclude that 12.5% of fair
          value was "inadequate" consideration for the Anson assets.   See,
          e.g., Miner v. Bennett, 556 S.W.2d 692, 695 (Mo. Ct. App. 1977)
          ("The assumption by the grantees of the mortgages in an amount
                                         39

          equal to approximately 
                                one 
                                    fourth of the value of the property was
          not an adequate consideration for the transfer.") (emphasis added).
                    Moreover, even assuming 
                                           arguendo that the circumstantial
          evidence of fraudulent intent presented by Peters, in the way of
          demonstrating "inadequate consideration," could not have survived
          the Rule 50(a) motion for judgment as a matter of law, Peters
          adduced competent direct evidence of actual fraudulent intent as
          well. Actual fraud is a successor liability test entirely indepen-
          dent of the circumstantial "mere continuation" test.    See  H.J.
          Baker, 554 A.2d at 205 (describing "mere continuation" test as
          "[a]n exception," not as "the" exception, to the general rule of
          "nonassumption"; citing, with approval, Jackson, 241 A.2d at 477,
          which recognized the "actual fraud" test as distinct from the "mere
          continuation" test, see id. at 475);   Cranston 
                                                          Dressed 
                                                                  Meat, 57
          R.I. at 348 (noting that "nonassumption" presumption applies only
          "in the absence of fraud");  see  also Joseph 
                                                        P. 
                                                            Manning 
                                                                    Co. v.
          Shinopoulos, 56 N.E.2d 869, 870 (Mass. 1944) (UFCA case) ("[A]t
          common law, if the conveyance is made and received for the purpose
          of hindering, delaying or defrauding creditors it is fraudulent and
          can be set aside without regard to the nature or amount of
          consideration."); Eagle 
                                  Pacific, 934 P.2d at 721 (noting that,
          besides the separate "mere continuation" theory, "[s]uccessor
          liability may also be imposed where the transfer of assets is for
          the fraudulent purpose of escaping liability").
                              
                Baker focused on the "mere continuation" test simply because
          there was no evidence of actual fraudulent intent.
                                         40

                    Peters adduced   direct evidence that Considine and
          Jacobsen entered into the asset transfer with the specific intent
          to rid the business of all indebtedness due entities not essential
          to its future viability, including in particular the Peters sales
          commissions. Peters notified Anson in March 1993 that it intended
          to pursue Anson vigorously for payment of its sales commissions.
          See Dickinson, 935 S.W.2d at 364 (recognizing, as badge of fraud,
          "transfers in anticipation of suit or execution"); supra note 7.
          The intention to evade the Peters debt is explicitly memorialized
          in Jacobsen's notes, and yet more explicitly in the May 5, 1993
          memo from Considine to Fleet ("If Fleet can find a way to foreclose
          the company [
                      viz., on its security interests in Anson's real estate
          and operating assets] and sell certain assets to our company that
          would eliminate most of the liabilities discussed above, then we
          would offer Fleet . . . $3,250,000."). Thereafter, Fleet
          presciently forewarned Considine that its counsel was "not
          convinced that you will be able to do this [i.e., shed the Peters
          debt] without inviting litigation," and then insisted on an
          indemnification clause from C & J should any such litigation
          eventuate, 
                    see Credit Agreement q 8.10 (Oct. 26, 1993). Moreover,
          it is immaterial whether Considine believed that this evasive
          maneuver was essential to ensure the solvency and success of the
          Anson business; fraudulent intent need not be malicious.      See
          Balzer & Assocs., Inc. v. The Lakes on 360, Inc., 463 S.E.2d 453,
          455 (Va. 1995) ("[M]alicious intent is not an element required to
                                         41

          prove the voidability of the transfer.").
                         (iii) " Continuation of Business"
                    Furthermore, Peters proffered ample evidence on the third
          factor in the 
                       Baker test, by demonstrating that C & J did "continue
          [Anson's] business."   H.J. 
                                      Baker, 554 A.2d at 205. Among the
          considerations pertinent to the business continuity inquiry are:
          (1) whether the divesting and acquiring corporations handled
          identical products; (2) whether their operations were conducted at
          the same physical premises; and (3) whether the acquiring corpora-
          tion retained employees of the divesting corporation. 
                                                               See 
                                                                   id.; 
                                                                        see
          also Bagin, 593 N.E.2d at 407 ("The gravamen of the 'mere
          continuation' exception is whether there is a continuation of the
          corporate entity. Indicia of the continuation of the corporate
          entity would include the same employees, a common name, the same
          product, the same plant.") (citation omitted). 
                    C & J was incorporated in October 1993 for the specific
          purpose of acquiring the assets of the then-defunct Anson.    See
          Asher, 659 So. 2d at 599-600 (noting relevance of fact that
                              
                Once again in mistaken reliance on Casey, C & J points out
          that the  Casey court found no evidence of fraudulent intent.
          However, that determination was based on a finding that the
          original transferor had no knowledge of the plaintiff's potential
          lawsuit at the time of the asset transfer; hence, could not have
          effected the transfer with fraudulent intent to evade the debt it
          owed the plaintiff.  See Casey, 623 A.2d at 19. The  Casey court
          expressly noted, however, that "the consideration in this case
          would not have validated a transfer of assets if the transfer were
          made with notice of the existence of a claim of a creditor."  Id.
          at 19 n.4. Not only is it undisputed that the C & J principals
          knew of the Peters claim prior to October 1993, but Peters adduced
          direct evidence that the asset transfer was structured with the
          specific intent to evade the Peters debt.
                                         42

          divesting corporation ceased business operations soon after asset
          transfer, then liquidated or dissolved); Steel Co., 662 N.E.2d at
          600 (noting significance of circumstantial evidence that acquiring
          corporation "was incorporated on the same day that [predecessor]
          ceased . . . ."). Peters adduced evidence that C & J not only
          continued manufacturing the same jewelry products as Anson,   see
          H.J.  
               Baker, 554 A.2d at 205 (noting that two companies "sold
          virtually identical [] products"), but conducted its manufacturing
          at the same physical premises and continued servicing Anson's
          principal customer, Tiffany's. Moreover, its uninterrupted
          continuation of the Anson manufacturing business was prominently
          announced to Anson's customers in an October 1993 letter from C &
          J. See 
                 Glynwed, 869 F. Supp. at 277 (purchasing corporation "held
          itself out to the world '"as the effective continuation of the
          seller."'") (citations omitted);  Kleen  
                                                   Laundry  
                                                           &  
                                                              Dry  
                                                                   Cleaning
          Servs., 
                  Inc. v. Total 
                                Waste 
                                      Mgt., 
                                             Inc., 867 F. Supp. 1136, 1142
          (D.N.H. 1994) ("This seamless client transfer reveals that the
          defendant purchased and operated a complete business and, in so
          doing, tacitly held itself out to the public as the continuation of
          [] Portland Oil."); cf. United 
                                         States v. Mexico 
                                                          Feed 
                                                               & 
                                                                 Seed 
                                                                       Co.,
          764 F. Supp. 565, 573 (E.D. Mo. 1991) (noting that the acquiring
          corporation continued production of the same product lines and held
          itself out to the public as a continuation of the divesting
          corporation), aff'd in relevant part, 908 F.2d 478, 488 (8th Cir.
          1992). In its October 1993 letter, C & J stated that it had
          "acquired all of the assets of Anson," that it was its "intention
                                         43

          to build on [Anson's '55-year heritage of quality'] to reestablish
          the Anson brand as the pre-eminent one [in the jewelry market],"
          and that C & J had therefore " retained  all of the former  Anson
          employees [including Anson's 'current retail sales representation']
             the core of any business." (Emphasis added.)   See H.J. Baker,
          554 A.2d at 205; see also Cyr v.  B. 
                                               Offen 
                                                     & 
                                                       Co., 
                                                            Inc., 501 F.2d
          1145, 1153-54 (1st Cir. 1974) (same employees continued to produce
          same products in same factory); Mexico 
                                                 Feed, 764 F. Supp. at 572
          (noting relevance of finding that acquiring entity retained "same
          supervisory personnel" or "production facilities"). Finally, in
          order to facilitate the product-line continuation, C & J specifi-
          cally assumed responsibility for, and paid off, all indebtedness
          due Anson's "essential" trade creditors.  See Asher, 659 So.2d at
          600 (noting that "purchasing corporation [expressly] assumed those
          liabilities and obligations of the seller [   e.g., trade debts]
          ordinarily necessary for the continuation of the [seller's] normal
          business operations"). Thus, the Peters proffer handily addressed
          the third factor in the Baker inquiry.
                         (iv) Commonality of Corporate Officers 
                    Fourth, Peters adduced sufficient evidence at trial that
          C & J and Anson had "at least one common officer [viz., Considine
          or Jacobsen] who [was] instrumental in the [asset] transfer." 
                                                                       H.J.
          Baker, 554 A.2d at 205. C & J responds, inappositely, that the
          respective ownership interests held by the principals in the
          divesting and acquiring corporations were not identical, as
          Considine owned 52% of the Anson stock, whereas Jacobsen and the
                                         44

          Considine Family Trust were equal shareholders in C & J. 
                    The present inquiry does not turn on a complete identity
          of ownership ( i.e., shareholders), however, but on a partial
          identity in the corporate managements (i.e., "officers"). Thus,
          the fact that Jacobsen not only held a corporate office in both
          Anson and C & J but was instrumental in negotiating the asset
          transfer to C & J was sufficient in itself to preclude a Rule 50
          dismissal under the fourth prong, even if he were not an Anson
          shareholder.  See H.J. 
                                 Baker, 554 A.2d at 205 (noting that "the
          management [of the two companies] remained substantially the
          same").
                    Further, the same result obtains even if we were to
          assume that the "one common officer"     referred to in Baker    
          must be a shareholder as well. Prior to  Baker, the Rhode Island
          Supreme Court did not require complete identity between those who
          "controlled" the two corporations or the asset transfer, whether
          their "control" derived from stock ownership or from their manage-
          ment positions. For example, the court had upheld a judgment for
          plaintiff, following trial, even though the officers and incorpora-
          tors of the divesting and acquiring corporations were not the same,
          on the ground that the 
                                principals involved in the sale "all had a[]
          [common] interest in the transaction."  Cranston Dressed Meat, 57
          R.I. at 349;  cf. Casey, 623 A.2d at 19 (finding no successor
          liability where two corporations shared 
                                                 no stockholders, officers,
          or directors); 
                        cf. 
                            also 
                                 Glynwed, 869 F. Supp. at 277 ("[C]ontinuity
          of ownership, not uniformity, is the test.");  Park v. Townson 
                                                                          &
                                         45

          Alexander, Inc.
                        , 679 N.E.2d 107, 110 (Ill. App. Ct. 1997) ("We note
          that the continuity of shareholders necessary to a finding of mere
          continuation does not require complete identity between the
          shareholders of the former and successor corporations.").
          Considine easily fits the bill here. After all, "C & J" stands for
          something and Jacobsen conceded at trial that Considine "partici-
          pates in the management of C & J Jewelry." Moreover, Considine
          admitted that no C & J decision could be taken without Considine's
          prior approval. 
                    C & J heavily relies as well on the fact that Considine,
          individually, held no direct ownership interest in C & J, but
          instead had conveyed his interest to the Considine Family Trust.
          Once again, however, as equity looks to substance not form,   see
          Glynwed, 869 F. Supp. at 275, the fact that Considine established
          a family trust to receive his ownership interest in C & J did not
          warrant a Rule 50 dismissal, especially in light of his concession
          that he actively participates in the management of C & J.     See
          Fleet Credit Memo (10/14/93), at 1 ("[T]hese transactions will be
          considered a Troubled Debt Restructure ('TDR') because of
          Considine's effective control of the assets both before and after
          the contemplated transaction."); id. at 14 (noting that Considine
          would be a "Principal" of C & J, although his "involvement in day-
          to-day operations will be limited"). Moreover, such intra-family
          transfers may be nominal only, and thus may constitute circumstan-
          tial evidence of a fraudulent, manipulative intent to mask the
          continuity in corporate control.    See Park, 679 N.E.2d at 110
                                         46

          ("[W]hile the spousal relationship between the owners of the
          corporations does not in itself establish a continuity of share-
          holders, it is certainly a factor which can be considered."); The
          Steel 
                Co., 662 N.E.2d at 600 ("We cannot allow the law to be
          circumvented by an individual exerting control through his
          spouse."); 
                    Hoppa v. 
                             Schermerhorn & Co.
                                               , 630 N.E.2d 1042, 1046 (Ill.
          App. Ct. 1994) (noting that the fact that former joint tenant
          shareholder's interest was reduced to 2%, and that an additional
          family member was shareholder of successor corporation, did not
          preclude finding of continuity); cf. Dickinson, 935 S.W.2d at 364
          (recognizing "a conveyance to a spouse or near relative" as a badge
          of fraud); 
                    supra note 7 ("The debtor retained possession or 
                                                                    control
          of the property"). Focusing on the transactional substance, rather
          than its form, therefore, we cannot conclude that a rational
          factfinder could not decide that Considine used the family trust to
          camouflage his ultimate retention of control over the Anson jewelry
          manufacturing business which C & J continued to conduct, without
          interruption, after Anson's demise.  See National 
                                                            Gypsum, 895 F.
          Supp. at 337 ("The intended result in all cases is the same, to
          permit the owners of the selling corporation to avoid paying
          creditors without losing control of their business.") (emphasis
          added).
                         (v)  Insolvency of Divesting Corporation 
                    Finally, C & J does not dispute that Anson is a defunct
          corporation, consequently unable to pay its debt to Peters.   See
          Nelson v. Tiffany 
                            Indus., 778 F.2d 533, 535-36 (9th Cir. 1985)
                                         47

          ("Justification for imposing strict liability upon a successor to
          a manufacturer . . . rests upon . . . the virtual destruction of
          the plaintiff's remedies against the original manufacturer caused
          by the successor's acquisition of the business."); The Ninth Ave.
          Remedial Group
                       , 195 B.R. at 727 ("The successor doctrine is derived
          from equitable principles, and it would be grossly unfair, except
          in the most exceptional circumstances, to impose successor
          liability on an innocent purchaser when the predecessor is fully
          capable of providing relief . . . .").
                    Accordingly, since the Peters proffer, at the very least,
          generated a trialworthy dispute under each of the five      Baker
          factors, the Rule 50 motion was improvidently granted.
          e.   Tortious Interference with Contract
                    The tortious interference claim alleges that Fleet and
          Considine acted in concert not only to extinguish the debt Anson
          owed Peters for sales commissions, but caused Anson and C & J to
          displace Peters prematurely as the sales representative for the
          Tiffany's account. The parties agree that the tortious interfer-
          ence claim required that Peters prove: (1) a sales-commission
          contract existed between Anson and Peters; (2) Fleet and Considine
                              
                Anson retained but one asset     the keyman life insurance
          policy 
                   under which Fleet, not Anson, was the named beneficiary.
          See supra Section II.A.3(b). 
                Peters did not name Fleet in the successor liability count
          proper, nor seek to amend its complaint when the omission was
          brought to its attention at trial. Consequently, we deem any
          independent claim against Fleet abandoned. See 
                                                         Rodriguez v. 
                                                                      Doral
          Mortgage Corp.
                       , 57 F.3d 1168, 1172 (1st Cir. 1995) (abjuring trial
          by ambush).
                                         48

          intentionally interfered with the sales-commission contract, and
          (3) their tortious actions damaged Peters. 
                                                    See 
                                                        Jolicoeur Furniture
          Co. v. 
                Baldelli, 653 A.2d 740, 752 (R.I.), 
                                                   cert. 
                                                         denied, 116 S. Ct.
          417 (1995); 
                     Smith Dev. Corp.
                                      v. 
                                         Bilow Enters., Inc.
                                                            , 308 A.2d 477,
          482 (R.I. 1973). With respect to the first and third prongs, there
          is no dispute that Fleet and Considine knew of the Peters contract
          to serve as Anson's sales representative to Tiffany's, or that
          Peters sustained damages due to the premature termination of its
          sales-commission contract, without receiving payment for its
          outstanding commissions.
                    With respect to the disputed second criterion (   viz.,
          intent), Peters need only establish that Fleet or Considine acted
          with "legal malice 
                               an intent to do harm 
                                                    without 
                                                            justification."
          Mesolella v. City of Providence, 508 A.2d 661, 669-70 (R.I. 1986)
          (emphasis added); see Friendswood 
                                            Dev. 
                                                  Co. v. McDade 
                                                                & 
                                                                  Co., 926
          S.W.2d 280, 282 (Tex. 1996) (noting that defendant may assert
          defense of "justification," by demonstrating that the alleged
          interference was merely an exercise of its own superior or equal
          legal rights, or a good-faith claim to a colorable albeit mistaken
          legal right); see also  Shaw v. Santa 
                                                Monica 
                                                        Bank, 920 F. Supp.
          1080, 1087 (D. Haw. 1996); 
                                    Greenfield & Co. of N.J.
                                                            v. 
                                                               SSG Enters.
                                                                          ,
          516 A.2d 250, 257 (N.J. Super. Ct. 1986). Proof of "[actual]
          [m]alice, in the sense of spite or ill will, is not [only not]
          required," Mesolella, 508 A.2d at 669-70, it is immaterial,   see
          Texas 
                Beef 
                     Cattle 
                            Co. v. Green, 921 S.W.2d 203, 211 (Tex. 1995)
          ("[I]f the trial court finds as a matter of law that the defendant
                                         49

          had a legal right to interfere with a contract, then the defendant
          has conclusively established the justification defense, and the
          motivation behind assertion of that right is irrelevant.");   see
          also 
              Belden 
                     Corp. v. 
                              InterNorth, Inc.
                                              , 413 N.E.2d 98, 101 n.1 (Ill.
          App. Ct. 1980); Kan-Sa 
                                 You v. Roe, 387 S.E.2d 188, 192 (N.C. Ct.
          App. 1990). 
                    Since the successor liability claim was dismissed
          improvidently, 
                        see 
                            supra Section II.B.2(d), the tortious interfer-
          ence claim against Considine should have been submitted to the jury
          as well. Since a party normally cannot "interfere" with his own
          contract, 
                   see 
                       Baker v. 
                                Welch, 735 S.W.2d 548, 549 (Tx. App. 1987),
          Considine's status as Anson's CEO and controlling shareholder is
          pertinent. As its contracting agent, Considine is Anson, and thus
          had a qualified privilege to terminate the Peters contract. 
                    Nonetheless, specialized rules apply to tortious
          interference claims against corporate agents. Agency liability is
          precluded only if the agent either acted in the "best interests" of
          its principal (viz., Anson), see Texas 
                                                 Oil 
                                                     Co. v. Tenneco, 
                                                                      Inc.,
          917 S.W.2d 826, 831-32 (Tx. App. 1994), or, at the very least, did
          not act solely to advance his own personal interests, 
                                                               see 
                                                                   Stafford
          v. Puro, 63 F.3d 1436, 1442 (7th Cir. 1995) ("Directors and
          officers are not justified in acting solely for their own benefit
          or solely in order to injure the plaintiff because such conduct is
          contrary to the best interests of the corporation.");  Powell v.
          Feroleto Steel Co.
                           , 659 F. Supp. 303, 307 (D. Conn. 1986); 
                                                                   Phillips
          v. Montana 
                     Educ. 
                           Ass'n, 610 P.2d 154, 158 (Mont. 1980); see  also
                                         50

          Holloway v. Skinner, 898 S.W.2d 793, 796 (Tex. 1995) (noting that
          the personal benefit exception is the logically necessary corollary
          to the "rule that a party cannot tortiously interfere with its own
          contract").
                    Since Anson was insolvent, see infra Section II.B.2(f),
          Considine's own investment in Anson was negligible at best, and the
          trial record discloses that he not only acted intentionally to
          evade Anson's obligation to Peters, but at the same time negotiated
          for himself a $200,000 consulting fee. Thus, the circumstantial
          evidence and the Considine memoranda to Fleet generated a
          trialworthy issue as to whether Considine acted with "legal
          malice."  See Mesolella, 508 A.2d at 669-70; see, e.g., Dallis v.
          Don 
              Cunningham 
                         & 
                            Assocs., 11 F.3d 713, 717-18 (7th Cir. 1993)
          (upholding jury verdict against corporate officer who had directed
          corporation not to pay plaintiff his sales commissions, and where
          the officer's "own compensation . . . skyrocketed" during the
          relevant time period);  see  also, e.g.,  Chandler v.  Bombardier
          Capital,  
                   Inc., 44 F.3d 80, 83 (2d Cir. 1994) (upholding jury
          verdict against corporate officer who induced plaintiff's dismiss-
          al, then personally took charge of plaintiff's department). This
          is not a call the district court could make on a motion for
          judgment as a matter of law.
                    On the other hand, the tortious interference claim
          against Fleet fails because Peters did not name Fleet as a
          defendant in this count, nor move to amend when Fleet brought the
          omission to Peters' attention. Cf. supra note 23. Even if Peters
                                         51

          had not abandoned its claim, moreover, it cites      no apposite
          supporting case law.  See Carlton, 923 F.2d at 3 (plaintiff who
          selects federal forum not entitled to trailblazing interpretations
          of state law). Fleet unquestionably had a valid legal right to
          foreclose on Anson's assets in March 1993, and the total Anson
          indebtedness to Fleet exceeded the proven value of the Fleet
          collateral. As this constituted an independent and legally suffi-
          cient "justification" for the Fleet foreclosure, a finding of
          "legal malice" appears to have been precluded as a matter of law.
          See Friendswood 
                          Dev., 926 S.W.2d at 282 ("justification" is the
          exercise of one's own legitimate legal rights); cf. Keene 
                                                                     Lumber
          Co. v.  Levanthal, 165 F.2d 815, 820 (1st Cir. 1948) (finding
          tortious interference where defendants made false representations
          to unsecured creditor, and attempted to avoid the unsecured
          creditor's claims by foreclosing upon sham chattel mortgages). 
                    f.   Breach of Fiduciary Duty
                    Finally, Peters claims that Considine breached a
          fiduciary duty to Peters, since the value of the shareholders'
          investment in an insolvent company is negligible, and the
          corporation's directors thereafter become trustees of "the
          creditors to whom the [company's] property . . . must go."  Olney
          v. Conanicut 
                       Land 
                            Co., 16 R.I. 597, 599 (1889) (emphasis added);
          see Unsecured 
                        Creditors' 
                                   Comm. v. Noyes (In 
                                                      re 
                                                         STN 
                                                             Enters.), 779
          F.2d 901, 904-05 (2d Cir. 1985); Association of Mill and Elevator
          Mut. Ins. Co.
                       v. 
                          Barzen Int'l, Inc.
                                            , 553 N.W.2d 446, 451 (Minn. Ct.
          App. 1996); Whitley v. Carolina Clinic, 455 S.E.2d 896, 900 (N.C.
                                         52

          Ct. App. 1995). Considine responds that Peters failed to establish
          that he converted any of the Anson assets to his personal use, and
          further that he could not have done so, because Fleet had a
          comprehensive lien on all operating assets. We disagree. 
                    A breach of fiduciary duty need not amount to a conver-
          sion in order to be actionable. "[D]irectors and officers [of
          insolvent corporations] may not pursue personal endeavors inconsis-
          tent with their duty of undivided loyalty to . . . the
          corporations' stockholders and creditors." American Nat'l Bank of
          Austin v. 
                   MortgageAmerica Corp.
                                         (
                                          In re MortgageAmerica Corp.
                                                                     ), 714
          F.2d 1266, 1276 (5th Cir. 1983); see National Credit Union Admin.
          Bd. v. 
                Regine, 749 F. Supp. 401, 413 (D.R.I. 1990) (as a fiduciary,
          director must "place the interests of the corporation before his
          own personal interests"). Whereas, the present record discloses,
          for example, that Considine negotiated a $200,000 consulting fee
          for himself as part of the October 1993 agreement,     see  supra
          Section I, and Peters received nothing. Therefore, the jury must
          determine whether Considine breached his duty as an Anson director:
                    If, then, the director be a trustee, or one
                    who holds a fiduciary relation to the credi-
                    tors, in case of insolvency he cannot take
                    advantage of his position for his own benefit
                    to their loss. The right of the creditor does
                    not depend on fraud or no fraud, but upon the
                    fiduciary relationship.
          Olney, 16 R.I. at 602.
                    In addition, Peters maintained, without citing to Rhode
          Island authority, that Fleet must be held answerable for inducing
          Considine to breach his fiduciary duty to the bypassed Anson credi-
                                         53

          tors. Fleet correctly counters that it cannot be held liable,
          however, since its comprehensive lien on the Anson operating assets
          precludes a finding that Peters was a "creditor[] to whom the
          [company's] property . . . must go."     Olney, 16 R.I. at 599.
          Moreover, even assuming the Rhode Island courts were to recognize
          such a cause of action, Peters would have had to show that: (1)
          Considine breached a fiduciary duty; (2) Fleet knowingly induced or
          participated in the breach; and (3) Peters sustained damages from
          the breach.  Whitney v. Citibank, 
                                             N.A., 782 F.2d 1106, 1115 (2d
          Cir. 1986). We are unable to discern how Peters could succeed on
          a tortious inducement-to-breach claim which is essentially "analo-
          gous to a cause of action for intentional interference with
          contractual relations."  Id. Thus, for the reasons discussed in
          relation to the tortious interference claim against Fleet,    see
          supra Section II.B.2(e), we affirm the dismissal of the present
          claim as well.
                                         III
                                     CONCLUSION
                    Accordingly, the district court judgment is affirmed
          insofar as it dismissed all claims against Fleet; the judgments in
          favor of C & J and Considine are affirmed, except for the successor
          liability claim against C & J and the claims for tortious interfer-
          ence with contract and breach of fiduciary duty against Considine,
          which claims are remanded to the district court for further
                                         54

          proceedings consistent with this opinion.
                    SO ORDERED. 
                              
                We note also that though we have adverted to various
          numerical figures, drawn from the trial record, to demonstrate in
          broad outline that Peters did generate trialworthy factual disputes
          appropriately left to the trier of fact, we do not suggest that the
          court, on remand, is in any way bound by these figures, as
          distinguished from the legal principles espoused in our opinion.
                                         55