(7th Cir. Jan. 20, 2016)
The Seventh Circuit reverses the district court and affirms the bankruptcy court, holding that a tax sale under Illinois’s interest rate auction system does not necessarily establish a transfer for reasonably equivalent value under 11 U.S.C. § 548(a)(1)(B). Thus, property sold under such system can still be considered fraudulently conveyed. Under this Illinois system, the winning bid amount bears no relationship to the value of the underlying real estate because the lowest bid wins (i.e., bidders bid how little money they are willing to accept in return for payment of the owner’s delinquent taxes). Opinion below.
Author: Matt Lindblom