IN RE IMAGE WORLDWIDE, LTD., Debtor. DAVID P. LEIBOWITZ, Chapter 7 Trustee, Plaintiff-Appellee, v. PARKWAY BANK & TRUST CO., Defendant-Appellant., 139 F.3d 574

Summary

Appellee trustee instituted an adversarial proceeding pursuant to 11 U.S.C.S. § 544(b) alleging that appellee debtor's transfers to appellant bank were fraudulent and in violation of the Uniform Fraudulent Transfer Act, 740 Ill. Comp. Stat.160/5. Appellee debtor guaranteed loans paid to an affiliate corporation. Both corporations were owned by the same person, but only the affiliate corporation received funds from the loan. The court found that the bankruptcy court did not clearly err in ruling that the guarantees were fraudulent transfers because there was no consideration for the guarantee of appellee debtor's loan. The court held that the bankruptcy court's finding that appellee debtor's receivables were used to pay down its trade debts was not clearly erroneous; thus, the bankruptcy court properly held that while appellee debtor received an indirect benefit from the transaction, because it stayed in business, it did not receive reasonably equivalent value. The court affirmed the ...