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the debt owed to the sole shareholder was preferred over the
liabilities owed to the States of Pennsylvania and Ohio and
respondent.
It is clear that petitioner through its agent, Mr. Self,
Jr., had knowledge of all the operative facts and circumstances
concerning Self Oil’s dire situation and its scheme to transfer
its assets before the commencement of collection activities.
Accordingly, we hold that 12 Pa. Cons. Stat. Ann. section 5108
does not provide petitioner relief from liability as a
transferee.13
We disagree with petitioner’s self-serving argument that the
sale as consummated “was a far better result than what would have
occurred in a liquidation.” Self Oil and petitioner did not have
the right to pick and choose which creditors got paid. Among
those creditors paid was Mr. Self, Sr., who received hundreds of
thousands of dollars from petitioner. We agree with respondent
that Self Oil and petitioner structured the transaction in such a
way as to provide Mr. Self, Sr., with a preferential repayment
status. Clearly, “Transactions between a debtor-corporation and
13Since 12 Pa. Cons. Stat. Ann. sec. 5108(a) (West 1999) is
a conjunctive test, in light of our holding, we need not analyze
or determine whether petitioner paid a “reasonably equivalent
value” for the assets transferred. In Hagaman v. Commissioner,
100 T.C. 180, 184 (1993), we explained that inquiries into the
adequacy of consideration “often are unnecessary because
respondent will be permitted to prove a fraudulent transfer
[under State law] by demonstrating actual intent to defraud.”
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