Lindsay

This case requires us to construe the “reasonably equivalent value” standard in bankruptcy law for determining whether a conveyance is fraudulent. We deferred submission before the case was scheduled to be argued because the Supreme Court had granted certiorari in a case which would resolve the controlling issue. After the Supreme Court decision came down, BFP v. Resolution Trust Corporation, — U.S. -, 114 S.Ct. 1757 , 128 L.Ed.2d 556 (1994), we obtained supplemental briefs from the parties on its effect, and now apply it to the case at bar. Because the Supreme Court rejected the doctrine applied by the bankruptcy court in its published decision at In re Lindsay, 98 B.R. 983 (Bankr.S.D.Cal.1989), we must reverse.

I. FACTS.

John Lindsay was the president of Lindsay Enterprises, Inc., which itself was the general partner in two limited partnerships, called IMA 79-6 and IMA 81-3. The limited partnerships borrowed $1.4 million from Beneficial Reinsurance Company to invest in an apartment complex in Texas called Greenway Plaza Apartments. The limited partnerships’ note to Beneficial was secured by a deed of trust.

The limited partnerships sold the real estate to Greenway Plaza…