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debts in the ordinary course of business after making the
distribution”. Minn Stat. Ann. sec. 302A.551, subdiv. 1.
Respondent has established that Butler and McGraw caused
Metro to avoid paying taxes they knew to be owing. Scott v.
Commissioner, 117 F.2d 36 (8th Cir. 1941); Hagaman v.
Commissioner, 100 T.C. 180, 183 (1993). The liquidating
distribution to petitioners, for which Metro did not receive
anything in exchange from petitioners, rendered Metro insolvent
(i.e., unable to pay those taxes in the ordinary course of
business). Accordingly, the distribution was a fraudulent
transfer pursuant to section 513.45 of the UFTA, and illegal
pursuant to section 302A.551 of the MBCA. We conclude that
petitioners’ liability is established pursuant to either statute.
Petitioners also contend that several Minnesota statutes of
limitation (Minn. Stat. Ann. secs. 541.05 (West Supp. 2002),
302A.557, and 302A.7291 (West Supp. 2002)) bar respondent’s tax
claims. We disagree. Minnesota statutes of limitations are
inapplicable to transferee proceedings governed by section 6901.
See Phillips v. Commissioner, supra; see also Dillman v.
Commissioner, 64 T.C. 797 (1975).
B. Petitioners’ Rebuttal of Respondent’s Prima Facie Case
Petitioners contend that, pursuant to section 302A.557,
subdivision 1, of the MBCA, petitioners’ liability is limited to
$459,635 of tax, $323,000 of penalties, and interest accrued as
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