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An Exercise In Economics: Determining “Value” Under § 548 Of The Bankruptcy Code, Gregory R. Bruno

Bankruptcy Research Library

(Excerpt)

Determining whether a debtor receives value for a constructively fraudulent prepetition transfer under section 548 of the Bankruptcy Code can prove troublesome when a debtor receives only an indirect, intangible benefit. Section 548 allows a bankruptcy trustee to avoid and recover a debtor’s prepetition transfers for which the debtor did not receive “reasonably equivalent value.” However, judicial interpretation of the term “value” has greatly limited the kinds of benefits to the debtor that might qualify.

Gold v. Marquette (In re Leonard) both illustrates the limitations that courts have placed on the term “value” for purposes of section …