538
Opinion of the Court
piece of property is the price which it might be expected to bring if offered for sale in a fair market; not the price which might be obtained on a sale at public auction or a sale forced by the necessities of the owner, but such a price as would be fixed by negotiation and mutual agreement, after ample time to find a purchaser, as between a vendor who is willing (but not compelled) to sell and a purchaser who desires to buy but is not compelled to take the particular . . . piece of property." Black's Law Dictionary 971 (6th ed. 1990). In short, "fair market value" presumes market conditions that, by definition, simply do not obtain in the context of a forced sale. See, e. g., East Bay Municipal Utility District v. Kieffer, 99 Cal. App. 240, 255, 278 P. 476, 482 (1929), overruled on other grounds by County of San Diego v. Miller, 13 Cal. 3d 684, 532 P. 2d 139 (1975) (in bank); Nevada Nat. Leasing Co. v. Hereford, 36 Cal. 3d 146, 152, 680 P. 2d 1077, 1080 (1984) (in bank); Guardian Loan Co. v. Early, 47 N. Y. 2d 515, 521, 392 N. E. 2d 1240, 1244 (1979).
Neither petitioner, petitioner's amici, nor any federal
court adopting the Durrett or the Bundles analysis has come to grips with this glaring discrepancy between the factors relevant to an appraisal of a property's market value, on the one hand, and the strictures of the foreclosure process on the other. Market value cannot be the criterion of equivalence in the foreclosure-sale context.4 The language of § 548(a)(2)(A) ("received less than a reasonably equivalent
4 Our discussion assumes that the phrase "reasonably equivalent" means "approximately equivalent," or "roughly equivalent." One could, we suppose, torture it into meaning "as close to equivalent as can reasonably be expected"—in which event even a vast divergence from equivalent value would be permissible so long as there is good reason for it. On such an analysis, fair market value could be the criterion of equivalence, even in a forced-sale context; the forced sale would be the reason why gross in-equivalence is nonetheless reasonable equivalence. Such word-gaming would deprive the criterion of all meaning. If "reasonably equivalent value" means only "as close to equivalent value as is reasonable," the statute might as well have said "reasonably infinite value."
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