Court Opinion

ID: 8899602
Source: CourtListenerOpinion
Date Created: 2022-11-27 00:49:35.621668+00
Date Added: 2024-06-11T17:07:44.607983
License: Public Domain

WRIGHT, Circuit Judge
(concurring and dissenting):
I concur in all but Section V of the majority opinion. I would limit First American’s unsecured claim to $108,000 plus interest.
Section 67d(6) distinguishes those creditors with fraudulent intent from those without it, for purposes of determining secured status. Those with fraudulent intent have no rights under Section 67d(6), but only under Section 57g. Under Section 57g, creditors may prove whatever claims they have against the bankrupt estate upon surrender of the fraudulent conveyance.
Had Tri-Aviation never laundered the Hot Springs title but simply retained it in its own name, Tri-Aviation would have had an unsecured claim for $108,000 under Section 57g, despite the presence of its fraudulent intent. First American, as subgrantee, has the same claim of $108,000 against the bankrupt estate, and has an additional claim of $54,500 ($162,500 minus $108,000) against Tri-Aviation.
Section IV of the majority opinion upholds the district court’s finding that First American had actual fraudulent intent. Thus, any rights First American might have had under Section 67d(6), had it been a bona fide purchaser, are irrelevant. Since *1216First American has no Section 67d(6) claim against the property, but has only a claim on the debt, its unsecured claim against the bankrupt estate cannot possibly rise higher than the claim of Tri-Aviation. This result should not be different merely because TriAviation made, through Lockwood, what First American knew to be a worthless pledge of real property.