Cite as: 511 U. S. 531 (1994)
Souter, J., dissenting
avoidance of a foreclosure-sale transfer must persuade the bankruptcy court that the price obtained on prebankruptcy transfer was "unreasonabl[y]" low, and as in other cases under the provision, the gravamen of such a claim will be that the challenged transfer significantly and needlessly diminished the bankruptcy estate, i. e., that it extinguished a substantial equity interest of the debtor and that the fore-closing mortgagee failed to take measures which (consistently with state law, if not required by it) would have augmented the price realized.13
price "that would have been received if the foreclosure sale had proceeded according to [state] law." Ante, at 546; cf. ante, at 540 (expressing skepticism about judicial competence to determine "such a thing" as a "fair" forced-sale price).
13 In this regard and in its professions of deference to the processes of local self-government, the Court wrongly elides any distinction between what state law commands and what the States permit. While foreclosure sales "under state law" may typically be sparsely attended and yield low prices, see infra, at 564, these are perhaps less the result of state law "strictures," ante, at 538, than of what state law fails to supply, incentives for foreclosing lenders to seek higher prices (by availing themselves of advertising or brokerage services, for example). Thus, in judging the reasonableness of an apparently low price, it will surely make sense to take into account (as the Court holds a bankruptcy court is forbidden to) whether a mortgagee who promptly resold the property at a large profit answers, "I did the most that could be expected of me" or "I did the least I was allowed to."
I also do not join my colleagues in their special scorn for the "70% rule" associated with Durrett v. Washington Nat. Ins. Co., 621 F. 2d 201 (CA5 1980), which they decry, ante, at 540, as less an exercise in statutory interpretation than one of "policy determinatio[n]." Such, of course, it may be, in the limited sense that the statute's text no more mentions the 70% figure than it singles out procedurally regular foreclosure sales for the special treatment the Court accords them. But the Durrett "rule," as its expositor has long made clear, claims only to be a description of what foreclosure prices have, in practice, been found "reasonabl[e]," and as such, it is consistent (as the majority's "policy determination" is not), with the textual directive that one value be compared to another, the transfer being set aside when one is unreasonably "less than" the other. To the extent, moreover, that Durrett is said to have announced a "rule," it is better
561
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