Zeddun v. Griswold (In re Wierzbicki)
- Summarized by Steven Mulligan , Coan, Payton & Payne, LLC
- 6 years 10 months ago
- Citation:
- Zeddun v. Griswold (In re Wierzbicki), Case No. 16-1334 (7th Cir. July 27, 2016).
- Tag(s):
-
- Ruling:
- Promising not to pursue essentially meritless litigation is not reasonably equivalent value when exchanged for an interest in a farm valued at $151,000.00 and the benefit of avoiding further family conflict is too nebulous to support a finding of reasonably equivalent value.
- Procedural context:
- The bankruptcy court found that the transfer of Debtor’s interest in a farm within two years before her bankruptcy filing was fraudulent because she didn’t receive reasonably equivalent value in exchange. The District Court affirmed as did the 7th Circuit. Conclusions of law reviewed de novo and findings of fact reviewed under a clearly erroneous standard.
- Facts:
- Debtor lived and worked on a farm with the defendant and their children but their personal and business relationship soured. The defendant sued Debtor and the state court found that the defendant had no interest in the farm. He appealed which was dismissed although he had also filed other appeals. Debtor wanted to end the litigation and signed over her interest in the farm to defendant in exchange for his promise to abandon the litigation and assume the $149,000.00 debt. The bankruptcy court found that at the time of the transfer, the value of Debtor’s interest in the farm was $151,000.00, which took the debt into account, and that defendant’s remaining claims in state court were essentially meritless so the cost of defending the same would have been minimal compared to the value she was giving up. The 7th Circuit seemed to find irony in the fact that under defendant's defensive theory, Debtor “gave up the farm to eliminate the risk of losing the farm” in the state court litigation.
- Judge(s):
- Wood, Rovner, Hamilton (Per Curium)
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