Issue link: https://mbozikis.ufcontent.com/i/1422521
116 (ii) were "constructively fraudulent" in that they were made or incurred for less than reasonably equivalent value and the debtor (a) was insolvent at the time of, or became insolvent as a result of, the transfer or obligation, 68 (b) was engaged in or about to engage in business for which it was undercapitalized, (c) intended to or believed it would incur debts beyond its ability to pay when due, or (d) made such transfers to or for the benefit of an insider under an employment contract and not in the ordinary course of business. 11 U.S.C. ยง 548(a)(1). A finding of constructive fraud hinges on the definition of "reasonably equivalent value" and a determination of the timing of the transfer in question. According to Section 548(d)(2), "'value' means property, or satisfaction or securing of a present or antecedent debt of the debtor, but does not include an unperformed promise to furnish support to the debtor or to a relative of the debtor." In order to receive reasonably equivalent value, the transferor must receive a benefit, which may be a direct or indirect benefit. In re TOUSA, Inc., 680 F.3d 1298 (11th Cir. 2012) (reversing district court and upholding bankruptcy court's factual findings that, based upon the facts before the court, the indirect benefits, including possible avoidance of a future bankruptcy filing, did not constitute reasonably equivalent value). Determining whether the value received is reasonably equivalent to the value transferred is a fact-intensive analysis. See Forman v. Jeffrey Matthews Fin. Grp., LLC (In re Halpert & Co.), 254 B.R. 104, 115 (Bankr. D. N.J. 1999); In re Roco Corp., 701 F.2d 978, 981-82 (1st Cir. 1983). The focus of the analysis is whether the exchange resulted in the preservation of assets for the benefit of the debtor's creditors. See Frontier Bank v. Brown (In re N. Merch., Inc.), 371 F.3d 1056, 1059 (9th Cir. 2004). It is therefore only material whether the debtor lost value or failed to receive equal value in the exchange, as such a transfer would deleteriously affect the debtor's creditors. See id. Furthermore, the debtor, and not some other entity, must receive the value. Also, for purposes 68 The test for insolvency in Section 548 is the "modified" balance sheet test discussed above in footnote 57.