Whether a non-judicial foreclosure sale, carried out under State law in the 90 days to 1 year before bankruptcy, will be considered a “preferential transfer,” and therefore invalid, will depend upon many factors. The court must hear evidence regarding whether or not the foreclosing creditor received more in the pre-bankruptcy foreclosure sale than it would have received through the bankruptcy. The court cannot say, as a matter of law, that such creditors always receive more in a pre-bankruptcy non-judicial foreclosure than they would have received in the bankruptcy. Therefore, whether a particular sale is barred as a preferential transfer will be determined on a case-by-case basis.

In re: Buckskin Realty Inc., Case No. 1-13-40083-nhl, Adv. Pro. No.: 15-01004-nhl
United States Bankruptcy Court, E.D. New York filed March 26, 2021, interpreting 11 USC Sec. 547 and BFP v. Resolution Trust Corp., 511 U.S. 531 (1994).

 

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