(7th Cir. May 15, 2015)
The Seventh Circuit affirms the order granting summary judgment to the defendant lender in the adversary proceeding. The debtor sought to avoid the lender’s affiliate’s recording of a deed following the debtor’s default on the loan. The debtor had agreed to place the deed in escrow in exchange for the lender forbearing on its right to foreclose on the property. When the debtor defaulted again, the deed was recorded. The debtor argued that the property was worth $1.7 million, while the loan balance was only $1.5 million. Thus, the debtor argued it did not receive reasonably equivalent value. The Court disagrees, finding the additional security served as consideration for forbearance. Opinion below.
Author: Matt Lindblom