In re Thames, Bankruptcy No. 80-01082

CourtUnited States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
Writing for the CourtJ. BRATTON DAVIS
Citation21 BR 704
PartiesIn re Henry W. THAMES, Jr. and Janet D. Thames, d/b/a The Flower Shop, Debtors. Kevin CAMPBELL, Trustee, Plaintiff, v. Janet D. THAMES and Henry W. Thames, Jr., Defendants.
Decision Date02 November 1981
Docket NumberComplaint No. 81-0164.,Bankruptcy No. 80-01082

21 B.R. 704 (1981)

In re Henry W. THAMES, Jr. and Janet D. Thames, d/b/a The Flower Shop, Debtors.
Kevin CAMPBELL, Trustee, Plaintiff,
v.
Janet D. THAMES and Henry W. Thames, Jr., Defendants.

Bankruptcy No. 80-01082, Complaint No. 81-0164.

United States Bankruptcy Court, D. South Carolina.

November 2, 1981.


21 BR 705

Ackerman, Woodard & Campbell, Walterboro, S.C., for plaintiff.

Harvey, Battey & Bethea, P.A., Beaufort, S.C., for defendants.

J. BRATTON DAVIS, Bankruptcy Judge.

The plaintiff, as trustee in bankruptcy, asks this court to set aside a transfer of a one-half undivided interest in real property by the debtor H. William Thames, Jr., to his wife, Janet D. Thames (both debtors herein), on the ground that it was a fraudulent transfer under 11 U.S.C. § 548(a)(2) of the Bankruptcy Code because it was made without adequate consideration while Mr. Thames was insolvent. The plaintiff also asks this court to deny Mrs. Thames' claim of exemption in the transferred property.1 The defendants request that the complaint be dismissed. The plaintiff has moved for summary judgment.

For the reason that no money or other consideration was given by Mrs. Thames for the transfer, the trustee contends that, regardless of the intent of the defendants in making the transfer, it is fraudulent under § 548 which provides, in pertinent part:

"(a) The trustee may avoid any transfer of an interest of the debtor in property, or any obligation incurred by the debtor, that was made or incurred on or within one year before the date of the filing of the petition, if the debtor —
* * * * * *
(2)(A) received less than a reasonably equivalent value in exchange for such transfer or obligation; and
(B)(i) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation; * * *."

The defendants argue that because, at the time of the transfer, Mrs. Thames equitably owned the property interest no consideration for the transfer was required.

FINDINGS OF FACT

1. H. William Thames, Jr. and Janet D. Thames, the debtors-defendants herein, have been married for approximately twenty years.

2. On February 21, 1975, the defendants jointly purchased, for use as their residence, a house and four lots in Beaufort County, South Carolina, financing the purchase by note and mortgage. They intended to have the property jointly owned, i.e., jointly titled.

3. While all previous residences owned by them were titled in both defendants, the new residence, through error and without their desire, was titled only in the name of Mr. Thames.

4. The defendants, shortly after February 21, 1975, sold the house in which they had been living and which they owned as tenants in common, and applied a portion of the proceeds to improving their new residence.

5. The mortgage payments on the new residence were paid partially out of a joint checking account of the defendants, and partially by a flower business operated by Mrs. Thames.

6. The greater part of the defendants' income during their marriage has been earned by Mrs. Thames.

7. The defendants became aware of the titling error in November 1980 when, as a

21 BR 706
result of financial difficulties, they consulted an attorney concerning the filing of a bankruptcy case

8. Pursuant to the advice of counsel, Mr. Thames, on November 21, 1980, conveyed an undivided one-half (½) interest in the residence to Mrs. Thames by deed which recited, as consideration for the...

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