BFP (plaintiff) was a partnership formed to purchase a home in Newport Beach, California. The home was bought in 1987 from Sheldon and Ann Forman. Imperial Savings Association (Imperial) (defendant) was provided a first deed of trust on the property to secure a loan of $356,250. The Formans were provided a second deed of trust to secure a promissory note of $200,000. BFP defaulted on its payments to Imperial, which began foreclosure proceedings. The home was sold at a foreclosure sale in July 1989 to Paul Osborne (defendant) for $433,000. The foreclosure proceedings were all executed in conformance with California state law. BFP submitted a Chapter 11 bankruptcy petition in October 1989 and filed an action in the bankruptcy court to set aside the home’s transfer as a fraudulent conveyance, alleging that the home was worth $725,000 at the time of sale. The bankruptcy court granted summary judgment to Imperial; its decision was affirmed by the district court. On appeal, a divided bankruptcy appellate panel affirmed, as did the Court of Appeals for the Ninth Circuit. BFP petitioned the United States Supreme Court for certiorari.