IN RE: 4100 WEST GRAND LLC, Debtor, 4100 WEST GRAND LLC, Plaintiff, v. TY GRAND LLC, Defendant., 481 B.R. 444

Summary

After the debtor failed to pay a reduced payoff amount, the creditor recorded a deed in lieu of foreclosure and took title and possession of certain commercial real estate as required by the provisions of a forbearance agreement. The transfer at issue was the recording of the deed. The only issue for determination was whether the debtor received reasonably equivalent value in return for the transfer. The court found that the release of the debtor’s indebtedness under the loan documents was value for the purposes of 11 U.S.C.S. § 548(a)(1)(B). The debtor also received value from the transfer when, pursuant to the forbearance agreement, the creditor waived its right to pursue monetary damages for any deficiency owed. The debtor failed to prove by a preponderance of the evidence that it received less than reasonably equivalent value in exchange for the transfer. The release of its indebtedness of over $2 million and the waiver of other claims was reasonably equivalent to the $1.6 million ...