In addition, transfers that offered additional businesses opportunities to the debtor may also be considered as part of the determination of reasonably equivalent value. These factors include the fair market value of the property, whether the transfer was made in good faith in the ordinary course of business, the existence of a special relationship between the parties, other offers or competitive bidding for the property, and the impact of the sale on the funds available to other creditors. As a result, courts will consider various factors surrounding the transfer to determine if it was for reasonably equivalent value. There may be legitimate reasons why a debtor sells property for less than it may appear to be worth. What Constitutes a Transfer for Reasonably Equivalent Value?īankruptcy law does not define reasonably equivalent value. The key issue is showing that the transfer was not made for reasonably equivalent value. Unlike actual fraud, there is no requirement to prove fraudulent intent of the debtor. Second, the debtor must have been insolvent at the time of the transfer or become insolvent because of the transfer. First, the debtor must have received less than reasonably equivalent value in exchange for such transfer or obligation.
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