- 15 -
70,744, multiplied by the $21.875 share price). Thus, the debtor
made the transfer without receiving a reasonably equivalent value
in exchange, and the debtor became insolvent as a result of the
transfer. See Minn. Stat. Ann. secs. 513.45 (West 2002),
302A.557 (West 1985). Metro’s tax liability for those years
remains unpaid. Accordingly, respondent has established a prima
facie case of equitable transferee liability. See Gumm v.
Commissioner, 93 T.C. 475 (1989).
Respondent relied on section 513.45 of Minnesota’s Uniform
Fraudulent Transfer Act (UFTA), Minn. Stat. Ann. sec. 513.45, to
establish that Metro was rendered insolvent by the distribution
of BFI stock, and accordingly, the distribution was fraudulent.
Petitioners contend that respondent erred by relying on the UFTA
to determine whether the transfer was fraudulent rather than
section 302A.551 of the Minnesota Model Business Corporation Act
(MBCA), Minn. Stat. Ann. sec. 302A.551 (West 1985), to determine
whether the distribution was illegal.
Section 513.45 of UFTA provides that a transfer is
fraudulent as to a present creditor if the debtor made the
transfer without receiving a reasonably equivalent value in
exchange for the transfer, and the debtor became insolvent as a
result of the transfer. Minn. Stat. Ann. sec. 513.45. Similarly
section 302A.551, subdivision 1, of the MBCA provides that a
distribution is illegal if the corporation is unable “to pay its
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011