In BFP v. Resolution Trust Corp., the Supreme Court held that the consideration received at a foreclosure sale is, in itself, reasonably equivalent value and rejected a minimum threshold amount. In its attempt to clarify the law, the Court left open the option for a bankruptcy trustee to avoid a foreclosure sale based on a lack of state law compliance. First, this Comment compares the decision in BFP and its predecessors with the legislative intent behind the various fraudulent transfer acts and § 548 of the Bankruptcy Code. Second, this Comment further proposes amending the Bankruptcy Code to require a trustee seeking avoidance of a real estate transfer to show a lack of substantial compliance with state real estate foreclosure laws and to expressly exempt foreclosure sales from § 548's reasonably equivalent value requirement. Finally, this Comment proposes needed definitions in § 101 of the Bankruptcy Code including definitions for 'reasonably equivalent value' and 'real estate foreclosure sale.'
Avoiding the Avoid: Re-securing the Mortgage Lender Post-BFP,
Emory Bankr. Dev. J.
Available at: https://scholarlycommons.law.emory.edu/ebdj/vol31/iss1/12