Court Opinion

ID: 1013532
Source: CourtListenerOpinion
Date Created: 2013-07-04 21:02:38.274849+00
Date Added: 2024-06-11T15:12:06.803387
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                  FOR THE FOURTH CIRCUIT

In Re: ABATEMENT ENVIRONMENTAL          
RESOURCES, INCORPORATED,
                          Debtor.

SCOTT D. FIELD,
                   Trustee-Appellant,             No. 03-1771

                  v.
UNITED STATES OF AMERICA, on
behalf of Internal Revenue Service,
                   Creditor-Appellee.
                                        
           Appeal from the United States District Court
            for the District of Maryland, at Greenbelt.
                  Andre M. Davis, District Judge.
                      (CA-02-4033-8-AMD)

                       Argued: February 24, 2004

                        Decided: June 15, 2004

     Before LUTTIG, KING, and GREGORY, Circuit Judges.

Affirmed by unpublished opinion. Judge Gregory wrote the opinion,
in which Judge King joined. Judge Luttig wrote a separate opinion
concurring in the judgment.

                              COUNSEL

ARGUED: Alan Barry Sternstein, SHULMAN, ROGERS, GAN-
DAL, PORDY & ECKER, P.A., Rockville, Maryland, for Appellant.
2           IN RE: ABATEMENT ENVIRONMENTAL RESOURCES
John Schumann, Tax Division, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: James
M. Hoffman, SHULMAN, ROGERS, GANDAL, PORDY &
ECKER, P.A., Rockville, Maryland, for Appellant. Eileen J.
O’Connor, Assistant Attorney General, Bruce R. Ellisen, Tax Divi-
sion, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

GREGORY, Circuit Judge:

   Abatement Environmental Resources, Inc. ("Abatement" or
"Debtor") filed a petition under Chapter 11 of the Bankruptcy Code
(which was later converted to a Chapter 7 action), reporting claims
exceeding the assets of the estate. The bankruptcy trustee Scott D.
Field (the "Trustee") instituted an adversary proceeding against the
United States Internal Revenue Service ("IRS") to recover three
alleged fraudulent conveyances. Abatement’s owner and principal
officer, Joseph Downey ("Downey"), authorized the three payments
to be made from corporate accounts to the IRS to satisfy his individ-
ual income tax liabilities. On cross-motions for summary judgment,
the bankruptcy court granted summary judgment for the Trustee,
holding that the Trustee could recover the payments as fraudulent
conveyances under Maryland law. The district court reversed, holding
that the Trustee’s state law fraudulent conveyance claim was barred
by Maryland’s "voluntary payment" doctrine which prevents recovery
from taxing authorities for voluntarily paid taxes, absent a special
statutory provision allowing a refund. The Trustee now appeals the
district court’s reversal.

  We find that the Trustee failed to carry his burden of showing that
Abatement received no consideration for the transfers to IRS, thus we
            IN RE: ABATEMENT ENVIRONMENTAL RESOURCES                  3
conclude that the Debtor cannot advance his claim under the Mary-
land Uniform Fraudulent Conveyance Act ("MUFCA"). While it is
clear that the IRS extended consideration to Downey, rather than to
Abatement, by releasing him from his tax liability, it is not clear that
Abatement’s payment to IRS did not constitute a repayment of a sal-
ary, loan, bonus or antecedent debt due Downey. Therefore, we affirm
the district court on alternative grounds and do not need to examine
the applicability of the voluntary payment doctrine.

                                   I.

   In the bankruptcy court, the parties agreed that there was no dispute
of material fact and filed cross-motions for summary judgment. We
do not engage in a detailed recitation of the facts as the bankruptcy
and district courts present full factual discussions in their published
opinions. See United States v. Field (In re Abatement Envtl. Res.,
Inc.), 301 B.R. 830, 831-32 (D. Md. 2003) ("Abatement II"); United
States v. Field (In re Abatement Envtl. Res., Inc.), 301 B.R. 824, 826-
27 (Bankr. D. Md. 2002) ("Abatement I").

   For the purposes of this appeal, it is sufficient to recount the fol-
lowing facts: Downey is a fugitive who was the owner and principal
officer of the Debtor. During 1997 and 1998, he drew three checks
on Abatement’s corporate checking accounts, totaling $212,000, to
pay individual income tax liabilities to the IRS. In 1999, IRS refunded
Downey $166,294 resulting from overpayments and withholding
credits on his individual income taxes.

   In October 1999, Abatement filed a voluntary petition under Chap-
ter 11 of the Bankruptcy Code. Claims against the estate totaled
approximately $4,000,000, exceeding the estate’s assets and those
available for distribution to creditors. In March 2000, the bankruptcy
court converted the case into a Chapter 7 proceeding and appointed
Field as trustee. In March 2001, Field filed this adversary proceeding
against the United States to recover alleged fraudulent conveyances
of the Debtor’s assets in the amount of $212,000, the total amount of
funds Downey transferred to IRS from Abatement’s accounts to pay
his individual income tax liability. The Trustee brought this action
pursuant to 11 U.S.C. §§ 548, 550, or Md. Code Ann. Com. Law
§§ 15-204, 15-205, 15-206, 15-207 and 11 U.S.C. § 544(b), request-
4            IN RE: ABATEMENT ENVIRONMENTAL RESOURCES
ing the bankruptcy court to order that these conveyances be avoided
and to enter judgment against the United States.

   On cross-motions for summary judgment, the bankruptcy court
held that 11 U.S.C. § 548 was unavailable to the Trustee because that
section only permits the avoidance of transfers made within one year
prior to filing of the bankruptcy petition, and Downey’s three checks
fell outside the limitations period.1 The court held, however, that the
Trustee could utilize 11 U.S.C. § 544(b)(1), which permits a trustee
to avoid certain transfers of the debtor’s property if the transfer is
voidable under "applicable state law by a creditor holding an unse-
cured claim," to recover the disputed funds. The court held that under
the "applicable state law," provisions of the MUFCA, Md. Code
Ann., Com. Law §§ 15-204, 15-205, authorized the Trustee’s recov-
ery of fraudulent conveyances from the IRS.2 Thus, after determining
that IRS was an "initial transferee" under 11 U.S.C. § 550(a)(1)3
against whom the Trustee could recover, the bankruptcy court granted
summary judgment for the Trustee on his § 15-204 claim, and ordered
IRS to pay the Trustee $212,000. Abatement I, 301 B.R. at 829-30.

  On appeal, the district court reversed, holding that the MUFCA, in
generally permitting the avoidance of fraudulent conveyances, did not
supplant Maryland’s "voluntary payment" doctrine.4 Abatement II,
    1
     Neither party has contested the correctness of this holding.
    2
     There is no sovereign immunity bar to the Trustee’s claim because 11
U.S.C. § 106(a)(1) abrogates the United States’ sovereign immunity for
actions brought pursuant to 11 U.S.C. § 544(b)(1).
   3
     Section 550(a)(1) provides: "Except as otherwise provided in this sec-
tion, to the extent that a transfer is avoided under section 544, 545, 547,
548 . . . of this title, the trustee may recover for the benefit of the estate,
the property transferred, or, if the court so orders, the value of such prop-
erty, from—(1) the initial transferee of such transfer or the entity for
whose benefit such transfer was made; or (2) any immediate or mediate
transferee of such initial transferee." The bankruptcy court held that IRS
was an "initial transferee" under § 550(a)(1) and was thus liable to the
trustee for the transfer of funds. Abatement I, 301 B.R. at 828-29.
   4
     The doctrine is best summarized as the principle that once a taxpayer
voluntarily pays a tax or other governmental charge, under mistake of
law or an illegal imposition, no common law action lies for the recovery
of that tax absent a special statutory provision sanctioning a refund. See
Apostol v. Anne Arundel County, 421 A.2d 582, 585 (Md. 1980).
             IN RE: ABATEMENT ENVIRONMENTAL RESOURCES                    5
301 B.R. at 834-35. The district court found that Maryland law pro-
vided no cause of action to recover a tax voluntarily paid, even if in
error or under an illegal imposition, absent a special statutory provi-
sion allowing a refund. Id. at 833-35. Accordingly, the district court
held that the Trustee was barred from recovery against the IRS on his
MUFCA claim. Id. at 835. The Trustee now appeals.

                                    II.

   We review the judgment of a district court sitting in review of a
bankruptcy court de novo, applying the same standards of review that
were applied in the district court. Litton v. Wachovia Bank (In re Lit-
ton), 330 F.3d 636, 642 (4th Cir. 2003). Specifically, we review the
bankruptcy court’s factual findings for clear error, while we review
questions of law de novo. Id.

                                   III.

   This appeal presents an unusual question under Maryland fraudu-
lent conveyance law, namely whether a bankruptcy trustee may
recover tax payments made by a debtor, authorized by its principal
officer, to satisfy tax liabilities of said officer. This attempt to use a
state law fraudulent conveyance action as a tax recovery provision
clearly does not conform to the origins or purposes of fraudulent con-
veyance doctrine. See infra. Thus, with that background in mind, we
proceed to analyze the application of the MUFCA in this most pecu-
liar context.5
  5
    We note that despite the unusual use of the MUFCA as a vehicle for
tax recovery, Trustee Field has attempted to employ this remedy before
and has been expressly foreclosed from doing so. In Field v. Montgom-
ery County, Md. (In re Anton Motors, Inc.), 177 B.R. 58 (Bankr. D. Md.
1995), Trustee Field attempted to use the MUFCA to recover as fraudu-
lent conveyances several real property tax payments made by the debtor
to cover the personal obligations of that debtor’s president. The bank-
ruptcy court held that Maryland’s voluntary payment doctrine barred
Field from utilizing the MUFCA in such a manner. Id. at 66-67. Despite
this indistinguishable holding, Trustee Field has repeatedly expressed
surprise and dismay that the district court in the instant case followed In
re Anton Motors, see Abatement II, 301 B.R. at 833-35, to bar his recov-
6            IN RE: ABATEMENT ENVIRONMENTAL RESOURCES
   Fraudulent conveyance law has its origins in the Statute of 13 Eliz-
abeth, ch. 5 (1571). See 5 Collier on Bankruptcy ¶ 548.01 (15th Ed.
Revised). The purpose of the fraudulent conveyance doctrine is to
prevent assets from being transferred away from a debtor in exchange
for less than fair value, leaving a lack of funds to compensate the
creditors. Id. In the foundational fraudulent conveyance case, In re
Twyne’s Case, 3 Co. Rep. 806, 76 Eng. Rep. 809 (Star Chamber
1601), the Star Chamber examined the facts surrounding such trans-
fers to determine whether they had "signs and marks" of a fraudulent
or malicious intent, such as secret transfers, continued ownership or
possession of property after its alleged transfer, self-serving represen-
tations in transfer documents that the transfer was not intended to
defraud creditors, transfers of substantially all assets, or transfers
made while action was pending against the transferor. See also Col-
lier’s, supra. In short, fraudulent conveyance law is aimed at prevent-
ing debtors from making collusive transfers to others — often friendly
recipients — in an attempt to avoid their creditors. See Fraudulent
Conveyance Law & its Proper Domain, Douglas G. Baird & Thomas
H. Jackson, 38 Vand. L. Rev. 829, 830 (1985) ("A debtor cannot
manipulate his affairs in order to shortchange his creditors and pocket
the difference. Those who collude with a debtor in these transactions
are not protected either.").

   In the United States, § 67(e) of the 1898 Bankruptcy Act directly
copied much of the Statute of 13 Elizabeth. Most states followed suit,
either recognizing 13 Elizabeth through common law, or expressly
adopting or reenacting it. See Fick v. Perpetual Title Co., 694 A.2d

ery despite the fact that neither party argued the voluntary payment doc-
trine below. See, e.g., Appellant’s Br. at 6 ("The District Court reversed
the Bankruptcy Court[ ] . . . on a ground that the United States did not
argue or even raise in defending against Trustee Field’s fraudulent con-
veyance action . . . . No doubt, that is because the ground is as novel as
it is, as a matter of law, incorrect."). Given Trustee Field’s apparent fail-
ure to appeal In re Anton Motors to the district court, and the Maryland
Court of Special Appeals’ subsequent favorable citation of In re Anton
Motors, see Molovinsky v. Fair Employ. Council of Greater Wash., Inc.,
839 A.2d 755, 765 (Md. Ct. Spec. App. 2003), Field’s expressed surprise
at the district court’s holding appears somewhat disingenuous.
            IN RE: ABATEMENT ENVIRONMENTAL RESOURCES                    7
138, 143 (Md. Ct. Spec. App. 1997) (citing 37 C.J.S. Fraudulent Con-
veyances § 2, at 852 (1943)). Maryland adopted the English statute,
1 Alexander’s British Statutes 499 (Coe’s ed. 1912), which remained
in effect until 1920, when the MUFCA was adopted. See Fick, 694
A.2d at 143; see also Clinton Petroleum Servs., Inc. v. Norris, 319
A.2d 304, 307 (Md. 1974) (stating that the MUFCA "replaced in vir-
tually identical terms the statute of 13 Elizabeth"). The Maryland
Court of Appeals remarked of the statute, "[t]he Uniform Act is
declaratory of the common law and is practically a restatement of the
Statute of 13 Elizabeth." Westminster Sav. Bank v. Sauble, 39 A.2d
862, 864 (Md. 1944) (citations omitted); see also Damazo v. Wahby,
305 A.2d 138, 141-142 (Md. 1973) (reiterating that the MUFCA is
declaratory of common law and did not restrict the legal or equitable
remedies already available to a creditor).

   Section 15-204 of the MUFCA, under which the bankruptcy court
held the Trustee could recover, provides: "Every conveyance made
and every obligation incurred by a person who is or will be rendered
insolvent by it is fraudulent as to creditors without regard to his actual
intent, if the conveyance is made or the obligation is incurred without
fair consideration." Md. Code Ann., Com. Law § 15-204. Such a
fraudulent conveyance claim thus consists of two elements (1)
whether fair consideration was present and (2) whether the transferor
is or will be rendered insolvent. See Lacey v. Van Royen, 267 A.2d
91, 93-95 (Md. 1970). In this case, it is uncontested that IRS did not
directly extend consideration to Abatement in exchange for the
$212,000 in tax payments. However, it is entirely unclear whether
Abatement received "fair consideration" from Downey, the principal,
in exchange for having paid tax liabilities on his behalf.

  The MUFCA defines "fair consideration" as follows:

     Fair consideration is given for property or an obligation, if:
     (1) In exchange for the property or obligation, as a fair
     equivalent for it and in good faith, property is conveyed or
     an antecedent debt is satisfied; or

     (2) The property or obligation is received in good faith to
     secure a present advance or antecedent debt in an amount
8           IN RE: ABATEMENT ENVIRONMENTAL RESOURCES
    not disproportionately small as compared to the value of the
    property or obligation obtained.

Md. Code Ann., Com. Law § 15-203.

   At oral argument, the court asked Appellant’s counsel whether
Abatement had received consideration from Downey in exchange for
the $212,000 paid to the IRS — whether such consideration from
Downey was in the form of monies owed in repayment of salary,
bonus, loan or some other obligation for services rendered. Appel-
lant’s counsel repeatedly answered that it had made no proffer of a
lack of consideration from Downey before the bankruptcy court or the
district court, and further expressed that he was uncertain how Abate-
ment’s financial records reflected the three checks paid to IRS for
Downey’s benefit. Given the lack of such showings, we have no way
to determine whether the principal’s actions were indeed adverse to
the corporation, or whether Debtor’s transfer to IRS was made to sat-
isfy an obligation to Downey and consideration flowed to Debtor
from the third-party. See Harman v. First Am. Bank of Md. (In re Jef-
frey Bigelow Design Group, Inc.), 956 F.2d 479, 485 (4th Cir. 1992)
("It is well settled that reasonably equivalent value can come from
one other than the recipient of the payments, a rule which has become
known as the indirect benefit rule.") (citing Rubin v. Mfrs. Hanover
Trust Co., 661 F.2d 979 (2d Cir. 1981)).

    As the Second Circuit recognized in Rubin, "[t]hree-sided transac-
tions . . . present special difficulties" in determining whether "fair
consideration" is present, but "a debtor may sometimes receive ‘fair’
consideration even though the consideration given for his property or
obligation goes initially to a third person." Id. at 991. The court fur-
ther remarked "[i]f the consideration given to the third person has ulti-
mately landed in the debtor’s hands, or if the giving of the
consideration to the third person otherwise confers an economic bene-
fit upon the debtor, then the debtor’s net worth has been preserved
. . . ." Id. (emphasis added); see also In re Jeffrey Bigelow, 956 F.2d
at 485 ("[T]he focus is whether the net effect of the transaction has
depleted the bankruptcy estate.").

  Here, there is a distinct possibility that precisely such a situation
occurred where Abatement received an economic benefit; i.e., Dow-
             IN RE: ABATEMENT ENVIRONMENTAL RESOURCES                     9
ney was owed monies by Abatement, Debtor made the transfer to IRS
on Downey’s behalf, and its net worth was not reduced because it
simply satisfied an outstanding liability. See, e.g., Klein v. Tabatch-
nick, 610 F.2d 1043, 1047 (2d Cir. 1979) (holding a transaction’s ben-
efit to the debtor "need not be direct; it may come indirectly through
benefit to a third person"); Williams v. Twin City Co., 251 F.2d 678,
681 (9th Cir. 1958) (analyzing "fair consideration" under the federal
bankruptcy act and holding "[c]onsideration can run to a third party,
so long as it is given in exchange for the promise sought to be
enforced"); Barr & Creelman Mill & Plumbing Supply Co. v. Zoller,
109 F.2d 924, 926 (2d Cir. 1940) (good faith novation agreement may
constitute consideration); Hofler v. Marion Lumber Co., 233 F. Supp.
540, 543 (D.S.C. 1964) (examining Uniform Fraudulent Conveyance
Act and stating, "[c]onsideration, of course, may run to a third party").
In this case, we cannot conclude that Debtor received no consider-
ation for its transfer to the IRS.

   At oral argument, the Trustee’s counsel contended, however, that
the Trustee’s failure to show an absence of consideration was of no
moment because the IRS had the burden to show that Abatement
received no consideration from Downey. In support of this proposi-
tion, Appellant’s counsel cited Braunstein v. Walsh (In re Rowanoak
Corp.), 344 F.3d 126 (1st Cir. 2003). We find Rowanoak contrary to
the position that Appellant claims it represents.

   While Rowanoak did not concern the unusual tax recovery theory
the Trustee asserts in this case, it did involve a Chapter 7 trustee’s
action under Massachusetts fraudulent conveyance law.6 In
Rowanoak, two years prior to filing for bankruptcy, the debtor corpo-
  6
    The Massachusetts provision at issue in Rowanoak states: "A transfer
made or obligation incurred by a debtor is fraudulent as to a creditor . . .
if the debtor made the transfer or incurred the obligation: . . . without
receiving a reasonably equivalent value in exchange for the transfer or
obligation, and the debtor: (i) engaged or was about to engage in a busi-
ness or a transaction for which the remaining assets of the debtor were
unreasonably small in relation to the business or transaction; or (ii)
intended to incur, or believed or reasonably should have believed that he
would incur, debts beyond his ability to pay as they became due." Mass.
Gen. Laws ch. 109A, § 5(a).
10          IN RE: ABATEMENT ENVIRONMENTAL RESOURCES
ration, Rowanoak, made six payments from its bank account to the
mother of its principal. 344 F.3d at 128. The trustee, uncertain about
the basis for the checks, filed a motion to compel Rowanoak to turn
over its books and records to the trustee. In response, the principal
filed an affidavit stating it did not have documents in its possession
relevant to payments made by the debtor to the principal’s mother. Id.
The trustee then commenced an adversary proceeding seeking to
recover the six payments as fraudulent conveyances. In response, the
principal’s mother claimed that the checks represented payments on
various pre-petition loans made by the principal to the company.
Unlike the instant case, the bankruptcy court held an evidentiary hear-
ing, and heard testimony from the principal, her mother and the
trustee, and considered evidence of "canceled checks, check registers,
and credit card statements." Id. at 129. After considering the evi-
dence, the court concluded that all of the checks from the principal’s
mother had been made payable to the principal, not the corporation,
and that Rowanoak’s tax returns did not identify any outstanding
loans to the principal’s mother. Id.

   The First Circuit held that "the Trustee undisputably has the burden
of proving the transfers were fraudulent, and this burden never shifts
to [principal’s mother]." Id. at 131. The court continued, "to meet his
prima facie burden, the Trustee had to present sufficient evidence to
establish the negative proposition that [principal’s mother] did not
loan funds to Rowanoak." Id. at 132 (emphasis added). The court con-
cluded that the trustee carried that burden by "present[ing] evidence
that no documents, such as a promissory note, mortgage, or security
interest supported [principal’s mother’s claim] that she had loaned
money to Rowanoak." Id. Although Rowanoak does not feature the
third-party complication at issue here — specifically, did the debtor
pay transferee to satisfy an obligation to principal — it clearly rejects
the proposition Appellant claims it represents, namely that the trans-
feree, not the debtor, has the burden to show lack of consideration.7
  7
    During the bankruptcy court proceeding, although the IRS mistakenly
argued that Downey, not Abatement, was the transferor, it correctly
noted that the Trustee failed to carry his burden to "show that the debtor
did not receive reasonably equivalent value in exchange for the money
taken by Downey," see IRS’s Bankr. Ct. Br. at 17 (citing cases), and that
"[t]he trustee has proffered no evidence whatsoever that the debtor
             IN RE: ABATEMENT ENVIRONMENTAL RESOURCES                   11
See also Oles Envelope Corp. v. Oles, 65 A.2d 899, 903 (Md. 1949)
("Where a conveyance is valid on its face, the burden of proof is upon
the party attacking the conveyance to show either (1) that it was not
made upon a good consideration, or (2) that it was made with a fraud-
ulent intent on the part of the grantor to hinder, delay or defraud his
creditors . . . .") (citations omitted); Totten v. Brady, 54 Md. 170
(1880) ("The burden of proof is upon the complainants to show that
the deeds in question were made without consideration . . . .");
Colandrea v. Union Home Loan Corp. (In re Colandrea), 17 B.R.
568, 579 (Bankr. D. Md. 1982) (holding that trustee "proved that no
consideration flowed to [debtor] in exchange for the mortgage," and
only after trustee showed the absence of any consideration "Maryland
law placed the burden of proof as to the solvency of the transferor
upon the party claiming under the conveyance"); Gen. Elec. Credit
Corp. v. Murphy (In re Duque Rodriguez), 895 F.2d 725, 726 n.1
(11th Cir. 1990) (burden of proving "reasonably equivalent" value
under fraudulent conveyance provision of 11 U.S.C. § 548(a)(2)(A)
lies with the trustee challenging the transfer); Rubin, 661 F.2d. at 993
(stating that the trustee has the burden of proving the absence of "fair
consideration") (citations omitted).8 Because the Trustee has failed to
carry his burden to show that Abatement received no fair consider-
ation from Downey, or another source, as a result of its transfer to
IRS, we conclude that he cannot satisfy the MUFCA.

received less than reasonably equivalent value in exchange for the trans-
fers at issue in this case. The transfers to and by Downey, the president,
C.E.O. and ultimate shareholder of the debtor, could have been payment
of salary, repayment of a loan, or repayment of the debtor’s expenses."
Id.
   8
     Despite the Trustee’s error as to who bears the burden of establishing
the absence of consideration, as Colandrea and other cases recognize, the
Trustee is correct that the burden of showing solvency to defeat a fraudu-
lent conveyance action lies with the transferee. See Lacey, 267 A.2d at
98 ("[T]he burden of proving the solvency of the debtor, that is, that he
retained sufficient means to pay his debts after the voluntary conveyance,
is on the transferee.") (internal quotation marks and citation omitted).
Yet because the Trustee failed to present evidence on the consideration
prong, examination of the solvency prong is unnecessary.
12            IN RE: ABATEMENT ENVIRONMENTAL RESOURCES
   Although it is clear that Abatement owed no money directly to IRS,
the Trustee has offered no evidence to show that the company
received no consideration from a third party, specifically Downey, for
the transfer. Thus, to allow the Trustee to prevail merely upon a
showing that Abatement received no consideration from the transferee
would undercut the purposes of the fraudulent conveyance doctrine.
In analyzing fraudulent conveyances, Professor Glenn wrote of
whether a transfer was for value that "the test is whether, as a result
of the transaction, the debtor’s estate was unfairly diminished." 1 Ger-
rard Glenn, Fraudulent Conveyances and Preferences § 275 (rev. ed.
1940); see also Westminster Sav. Bank, 39 A.2d at 863 ("The object
of the statute was to aid in the suppression of fraud by protecting
creditors from any conveyances by debtors to relatives or friends
under the pretext of discharging a moral obligation."). Under the facts
as presented by the Trustee, we cannot conclude that Abatement’s
estate was unfairly diminished by the transfer to IRS. See 3 Norton
Bankruptcy Law & Practice 2d § 58:2 (1997 & Supp. 2003) (recog-
nizing that under federal fraudulent conveyance law, like Maryland
law, "‘[v]alue’ includes the satisfaction of antecedent debt. Thus, a
fraudulent conveyance can occur where the debtor transfers property
for the benefit of a third party and receives no property or debt reduc-
tion in return."). If Abatement owed sums to Downey, the payment
to IRS — i.e., satisfaction of an "antecedent debt" constituting fair
consideration pursuant to Md. Code Ann., Com. Law § 15-203(a) —
did not unfairly diminish the company’s estate, rather it merely satis-
fied a preexisting obligation.

                                  IV.

   Because Trustee Field failed to establish that Abatement received
no consideration from its principal Downey or another third-party
source for its payment to IRS on behalf of Downey, Appellant cannot
recover under the MUFCA. Accordingly, we do not need to examine
the district court’s conclusion that Maryland’s "voluntary payment"
doctrine serves as a bar to the MUFCA.

                                                           AFFIRMED

LUTTIG, Circuit Judge, concurring in the judgment:

     I concur only in the judgment reached by the court today.