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companies. Respondent presented no persuasive evidence that Mr.
Solaas' salary was unreasonable. After considering all the facts
and circumstances, we hold that the salary KBI paid to Mr. Solaas
was reasonable and was not actual fraud on KBI's creditors.
2. Constructive Fraud
Respondent argues that Mr. Solaas did not give reasonably
equivalent value for the amount of increase in salary from 1987
to 1988.3 Mr. Solaas argues that he gave reasonably equivalent
value in exchange for the salary KBI paid him in 1988 and that
respondent has failed to carry the burden of proof because
respondent produced no evidence of reasonable compensation.
For the Court to find constructive fraud, KBI must not have
received reasonably equivalent value in exchange for the transfer
it made to Mr. Solaas (the salary it paid him). Cal. Civ. Code
secs. 3439.04(b), 3439.05. In general, what constitutes
"reasonably equivalent value" under the UFTA must be determined
from the standpoint of the transferor's creditors. In re
Prejean, 994 F.2d 706, 708 (9th Cir. 1993).
Respondent points out that Mr. Solaas alone determined the
salary KBI paid him and that the increase in his salary from 1987
to 1988 was five times greater than the increase to the other
3 Respondent concedes that KBI received reasonably
equivalent value for $156,000 of the $203,980 salary it paid to
Mr. Solaas in 1988.
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