In Re Bullion Reserve of North America, a California Corporation, Curtis B. Danning, Chapter 7 Trustee v. Theodore P. Bozek

Theodore P. Bozek appeals from a district court’s order affirming a bankruptcy court’s grant of summary judgment in favor of the bankruptcy trustee for Bullion Reserve of North America (BRNA). The trustee, Curtis B. Danning, sued Bozek under 11 U.S.C. § 547 (b) to set aside and recover an alleged preferential transfer made by BRNA to Bozek. We affirm.

BACKGROUND

BRNA was a California corporation that purported to be in the business of buying precious metals (bullion) for the public through a “member account program.” Customers became member account program participants by filling out a short application and paying a nominal administrative fee. Thereafter, program participants were entitled to purchase bullion through BRNA at wholesale prices fixed in the international market. BRNA charged a commission on all bullion orders it executed.

BRNA published a brochure describing its program. The brochure warranted that, upon request, BRNA would segregate and store a program participant’s bullion in a storage vault at Perpetual Storage Incorporated. BRNA also represented that the stored bullion would be under the trusteeship of the Intermountain Depository Corporation, its wholly owned…