Self Heating and Cooling, Inc., Transferee - Page 20

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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                 
               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                      
               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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