In re Horob Livestock Inc., (Bkrtcy.D.Mont.)

Avoidance - Prepetition quitclaim deeds transferring debtors' interests in real property were avoidable preferential transfers.

Prepetition quitclaim deeds transferring interests in real property from an individual debtor, a related corporate debtor, and the individual debtor's father to the individual debtor's brother were avoidable by the Chapter 7 trustee as preferential transfers. The transfers were made for the purpose of benefiting the brother and for antecedent debt owed by both debtors. In addition, both debtors were insolvent when the transfers were made, given that the sum of the debts owed by each debtor at the time of the transfers exceeded the fair market value of each debtor's assets. The transfers, moreover, enabled the brother to receive more than he would have if the debtors' property interests had been liquidated and distributed to all creditors. By virtue of the transfers, the brother received property worth approximately $312,541.67 on an obligation of $711,057.50, rather than the approximately $31,254.17 he would have received from a pro rata distribution in the individual debtor's case. The brother also would have benefited in similar amounts with respect to the corporate debtor's case.