United States Supreme Court
511 U.S. 531 (1994)
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.
Rule of Law
Holding and Reasoning (Scalia, J.)
Dissent (Souter, J.)
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