
USCA1 Opinion

	




                           UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT       No. 96-1642                            ED PETERS JEWELRY CO., INC.,                                Plaintiff, Appellant,                                         v.                          C & J JEWELRY CO., INC., ET AL.,                               Defendants, Appellees.                                                                        APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF RHODE ISLAND                 [Hon. Francis J. Boyle, Senior U.S. District Judge]                                                                                           Before                               Torruella, Chief Judge,                       Aldrich and Cyr, Senior Circuit Judges.                                                                Robert                      Corrente, with whom   Corrente,                                                      Brill                                                             &                                                               Kusinitz,                                                                          Ltd.,       Sanford J. Davis                        and                             McGovern & Associates                                                 were on brief for appellant.            John A. Houlihan                            , with whom                                        Edwards & Angell                                                        and                                                            Marc A. Crisafulli       were on brief for appellees Fleet National Bank and Fleet Credit Corp.            James                     J.                        McGair, with whom   McGair                                                   &                                                      McGair was on brief for       appellees C & J Jewelry Co., Inc. and William Considine, Sr.                                                                                       August 29, 1997                                                                        CYR, Senior Circuit Judge. Plaintiff Ed Peters Jewelry          Co., Inc. ("Peters") challenges a district court judgment entered          as a matter of law pursuant to Fed. R. Civ. P. 50(a) in favor of          defendants-appellees on Peters' complaint to recover $859,068 in          sales commissions from Anson, Inc. ("Anson"), a defunct jewelry          manufacturer, its chief executive officer (CEO) William Considine,          Sr. ("Considine"), its secured creditors Fleet National Bank and          Fleet Credit Corporation (collectively: "Fleet"), and C & J Jewelry          Company ("C & J"), a corporate entity formed to acquire Anson's          operating assets. We affirm the district court judgment in part,          and vacate and remand in part.                                          I                                     BACKGROUND                    We restrict our opening factual recitation to an          overview, reserving further detail for discussion in connection          with discrete issues. Anson, a Rhode Island jewelry manufacturer,          emerged from a chapter 11 reorganization proceeding in 1983.          Thereafter, Fleet routinely extended it revolving credit, secured          by blanket liens on Anson's real property and operating assets.                    In January 1988, Anson executed a four-year contract          designating Peters, a New York corporation, as one of its sales          agents. Peters serviced Tiffany's, an account which represented          roughly one third of all Anson sales. By the following year,                                             The facts are related in the light most favorable to appellant          Peters, the nonmoving party. See Fed. R. Civ. P. 50(a);                                                                  Coyante v.          Puerto Rico Ports Auth., 105 F.3d 17, 21 (1st Cir. 1997).                                          2          however, Anson had fallen behind in its commission payments to          Peters. During 1991, in response to Anson's dire financial straits          and the adverse business conditions prevailing in the domestic          jewelry industry at large, Fleet restructured Anson's loan          repayment schedule and assessed Anson an $800,000 deferral fee. In          1992, after determining that Anson had not achieved the pre-tax,          pre-expense earnings level specified in the 1991 loan restructuring          agreement, Fleet waived the default and loaned Anson additional          monies, while expressly reserving its right to rely on any future          default. Anson never regained solvency.    See Fleet Credit Memo          (10/14/93), at 6 ("[Anson] is . . . technically insolvent, with a          negative worth of $6MM at 12/31/92.").                    Fleet and Anson entered into further loan restructuring          negotiations in April 1993, after Fleet determined that Anson had          not achieved the prescribed earnings target for December 1992.          Fleet gave Anson formal written notice of the default.                    During May 1993, Considine, Anson's CEO, submitted a          radical "restructuring" proposal to Fleet, prompted by the fact          that Anson owed numerous creditors, including Peters, whose claims          represented a serious drain on its limited resources. Considine          recommended that Fleet foreclose on Anson's assets, that Anson be          dissolved, and that a new company be formed to acquire the Anson          assets and carry on its business. The Considine recommendation          stated: "If Fleet can find a way to foreclose [Anson] and sell          certain assets to our [new] company that would eliminate most of          the liabilities discussed above [                                          viz., including the Peters debt],                                          3          then we would offer Fleet . . . $3,250,000." The $3,250,000 offer          to Fleet also contemplated, however, that the new company would          assume all Anson liabilities to essential trade creditors. Other-          wise, Fleet was to receive only $2,750,000 for the Anson assets          following the Fleet foreclosure and Fleet would assume "all the          liabilities and the problems attached to it and, hopefully, be able          to work them out."                    Fleet agreed, in principle, to proceed with the proposed          foreclosure sale, noting reservations respecting only the foreclo-          sure price and the recommendation by Considine that the debt due          Peters neither be satisfied by Anson nor assumed by the new          company. In the latter regard, Fleet advised that its "counsel          [was] not convinced that you will be able to do this without          inviting litigation," and that "there may be a problem on this          issue."                     In October 1993, Fleet gave Anson formal notice that its          operating assets were to be sold in a private foreclosure sale to          a newly-formed corporation: C & J Jewelry. Ostensibly out of          concern that Tiffany's might learn of Anson's financial difficul-          ties, and find another jewelry manufacturer, Fleet did not invite          competing bids for the Anson operating assets.                    Meanwhile, Peters had commenced arbitration proceedings          against Anson, demanding payment of its unpaid sales commissions.          Peters subsequently secured two arbitration awards against Anson          for $859,068 in sales commissions. The awards were duly confirmed          by the Rhode Island courts.                                           4                    On October 22, 1993, Anson ceased to function; C & J          acquired its operating assets in a private foreclosure sale from          Fleet and thereupon continued the business operations without          interruption. After the fact, Anson notified Peters that all Anson          operating assets had been sold to C & J at foreclosure, by Fleet.                    C & J was owned equally by the Considine Family Trust and          Gary Jacobsen. Considine, Gary Jacobsen and Wayne Elliot, all          former Anson managers, became the joint C & J management team.          Jacobsen and Considine acquired the Anson operating assets from          Fleet for approximately $500,000 and Fleet immediately deposited          $300,000 of that sum directly into various accounts which had been          established at Fleet in the name of C & J. The $300,000 deposit          was to be devoted to capital expenditures by C & J. Fleet itself          financed the remainder of the purchase price (approximately $1.4          million), took a security interest in all C & J operating assets,          and received $500,000 in C & J stock warrants scheduled to mature          in 1998. C & J agreed to indemnify Fleet in the event it were held          liable to any Anson creditor.     See Credit Agreement q 8.10.          Considine received a $200,000 consulting fee for negotiating the          sale.                     In December 1993, Fleet sold the Anson real estate for          $1.75 million to Little Bay Realty, another new company incorporat-          ed by Considine and Jacobsen. Considine and Jacobsen settled upon          the dual-company format in order to protect their real estate          investment in the event C & J itself were to fail. The two          principals provided an additional $500,000 in capital, half of                                          5          which was used to enable Little Bay Realty to acquire the Anson          real estate from Fleet. The remainder was deposited in a Little          Bay Realty account with Fleet, to be used for debt service. Fleet          in turn advanced the $1.5 million balance due on the purchase          price. Little Bay leased the former Anson business premises to C          & J.                    In April 1994, Peters instituted the present action in          federal district court, alleging that Anson, C & J (as Anson's          "successor"), Considine, and Fleet had violated Rhode Island          statutory law governing bulk transfers and fraudulent conveyances,          and asserting common law claims for tortious interference with          contractual relations, breach of fiduciary duty, wrongful foreclo-          sure, and "successor liability." The complaint essentially alleged          that all defendants had conspired to conduct a sham foreclosure and          sale for the purpose of eliminating Anson's liabilities to certain          unsecured creditors, including the $859,068 debt due Peters in          sales commissions.                    The defendants submitted a motion in limine to preclude          the testimony of two witnesses                                            former banker Richard Clarke and          certified public accountant John Mathias      who were to have          provided expert testimony on the value of the Anson assets.          Ultimately, their testimony was excluded by the district court on          the grounds that their valuation methodologies did not meet minimum          standards of reliability and, therefore, their testimony would not          have aided the jury.                    Finally, after Peters rested its case in chief, the                                          6          district court granted judgment as a matter of law for all          defendants on all claims. The court essentially concluded that          neither Peters nor other Anson unsecured creditors had been wronged          by the private foreclosure sale, since Fleet had a legal right to          foreclose on the encumbered Anson assets which were worth far less          than the amount owed Fleet.                                          II                                     DISCUSSION          A.   Exclusion of Expert Testimony                     Many of the substantive claims asserted by Peters depend          largely upon whether Fleet was an    oversecured creditor,  i.e.,          whether the Anson assets were worth more than the total indebted-          ness Anson owed Fleet as of the October 1993 foreclosure. Other-          wise, since Fleet had a legal right to foreclose on all the Anson          assets, there could have been no surplus from which any Anson          unsecured or judgment creditor, including Peters, could have          recovered anything. Thus, evidence on the value of the Anson          assets at the time of the Fleet foreclosure was critical.                    Peters proffered the testimony of CPA John Mathias on the          value of the Anson assets. During voir dire, Mathias testified          that the total Anson indebtedness to Fleet amounted to $9,828,000,          but that the total value of its assets was $12,738,500.     The                                             A breakdown of the Mathias methodology follows:          Asset                    Maximum        Average        Minimum                                   Value          Value          Value                                                                                                                      7          district court granted the motion in limine in all respects.                1.   Standard of Review                    Peters tendered the Mathias testimony pursuant to Fed. R.          Evid. 702, which requires trial courts to assess expert-witness          proffers under a three-part standard.                                                Bogosian v.                                                            Mercedes-Benz of          N.A.,                 Inc., 104 F.3d 472, 476 (1st Cir. 1997). The trial court          first must determine whether the putative expert is "qualified by          'knowledge, skill, experience, training, or education.'"      Id.          (citation omitted). Second, it inquires whether the proffered          testimony concerns "'scientific, technical, or other specialized          knowledge.'" Id. (citation omitted). Finally, it must perform its          gatekeeping function, by assessing whether the testimony "will          assist the trier of fact to understand the evidence or to determine          a fact in issue."  Id. Thus, the trial court must decide whether                                        Accounts Receivable      1,500.000      1,500,000      1,500,000          Other Sales (Unrecorded)   418,000        409,000        400,000          Other Sales (Backlog)      400,000        400,000        400,000          Inventory                2,648,000      2,648,000      2,648,000          Machinery/Equipment        450,000        375,000        300,000          Real Estate              2,941,000      2,941,000      2,941,000          Intangible assets        2,714,000      1,998,500      1,283,000          Net Operating Losses     1,442,000      1,267,000      1,092,000          Life Insurance Policy    1,200,000      1,200,000      1,200,000          _________________________________________________________________          Total     (Avg)                         12,738,500          (less) Fleet Debt                       (9,828,000)          Amount Fleet Oversecured                 2,910,500               Evidence Rule 702 provides: "If scientific, technical, or          other specialized knowledge will assist the trier of fact to          understand the evidence or to determine a fact in issue, a witness          qualified as an expert by knowledge, skill, experience, training,          or education, may testify thereto in the form of an opinion or          otherwise." Fed. R. Evid. 702.                                          8          the proposed testimony, including the methodology employed by the          witness in arriving at the proffered opinion, "rests on a                                                                    reliable          foundation and is                            relevant to the facts of the case."  Id. at 476,          479 (citing Daubert v. Merrell                                           Dow                                               Pharms.,                                                        Inc., 509 U.S. 579,          591, (1993)) (emphasis added);                                         Vadala v.                                                   Teledyne Indus., Inc.                                                                       , 44          F.3d 36, 39 (1st Cir. 1995). Finally, the circumspect and deferen-          tial standard of review applicable to Rule 702 rulings contemplates          their affirmance absent manifest trial-court error. Bogosian, 104          F.3d at 476 (noting that "an expert witness's usefulness is almost          always a case-specific inquiry");    see also  United                                                                   States v.          Schneider, 111 F.3d 197, 201 (1st Cir. 1997) ("In [determining] .          . . relevance, . . . reliability, helpfulness[,] the district court          has a comparative advantage over an appeals panel . . . [and] is          closer to the case.").               2.   Total Anson Indebtedness                    The district court ruled that the proffered testimony          from Mathias, fixing the total Anson indebtedness to Fleet at          $9,828,000, was patently flawed. For one thing, Mathias admitted                                             The United States Supreme Court has granted certiorari in          Joiner v. General                             Elec.                                   Co., 78 F.3d 524 (11th Cir. 1996),  cert.          granted, 117 S. Ct. 1243 (1997), wherein the Eleventh Circuit held          that Daubert requires appellate courts to employ a more stringent          standard than "abuse of discretion" in reviewing trial court          "gatekeeping" rulings at the summary judgment or directed judgment          stage. See                      Cortes-Irizarry v.                                         Corporacion Insular de Seguros                                                                      , 111          F.3d 184, 189 n.4 (1st Cir. 1997);                                             compare                                                     Joiner, 78 F.3d at 529,          and              In re Paoli R.R. Yard PCB Litig.                                             , 35 F.3d 717, 749-50 (3d Cir.          1994) (same),                        with                             Duffee v.                                       Murray Ohio Mfg. Co.                                                         , 91 F.3d 1410-11,          1411 (10th Cir. 1996) (                                Daubert requires customary abuse-of-discre-          tion review), and Buckner v. Sam's                                               Club,                                                     Inc., 75 F.3d 290, 292          (7th Cir. 1996) (same). As the district court ruling was proper          under either standard, we need not opt between them.                                          9          not including the $800,000 deferral fee Anson owed Fleet in          connection with the 1991 loan restructuring, see supra Section I,          even though he did not question its validity. Moreover, Mathias          conceded that he had no independent knowledge regarding the total          Anson indebtedness, but compiled the $9,828,000 figure from          unspecified Fleet documents. Thus, Peters adduced no competent          evidence that the total Anson indebtedness was less than          $10,628,000.                3.   Value of the Fleet Security Interest                    The district court ruled, for good reason, that the          methodology Mathias used to arrive at the $12,738,500 total          valuation for the Anson assets was internally inconsistent and          unreliable. First, on deposition in February 1996 Mathias had          valued the Anson assets at only $10,238,000, roughly equal to the          total indebtedness Anson owed Fleet. After Fleet moved for summary          judgment, however, Mathias revised the valuation on Anson's assets          upward by approximately $2.5 million                                                  well above the total Fleet          indebtedness. Thus, the "moving target" nature of the valuation          alone provided ample reason for the district court to scrutinize          the Mathias methodology with special skepticism. Against this          backdrop, therefore, the deferential standard of review looms as a          very high hurdle for Peters. We turn now to the principal factors          which accounted for the increased valuation.                     a.   Net Operating Losses                    Mathias valued Anson's $5 million net operating loss          ("NOL") at approximately $1,267,000. Of course, an NOL                                         10          "carryforward" may have potential value to the taxpayer (   viz.,          Anson) if it can be used to offset future taxable income.                                                                   Mathias          conceded, however, that his inclusion of the NOL carryforward as an          Anson asset was "inconsistent," since an NOL normally cannot be          transferred, with certain exceptions inapplicable here ( e.g., a          change in the ownership of a corporate taxpayer through qualified          stock acquisitions). Thus, the Anson NOL carryforward would have          been valueless to a third-party purchaser at foreclosure.                     Mathias, on the other hand, included the $1,267,000 NOL          in tallying Anson assets on the theory that the Fleet foreclosure          extinguished Anson's future right to utilize the NOL, thereby          effectively "destroying" the asset. The Mathias thesis is beside          the point, however, since the appraisal was designed to determine          the value of Fleet's security  interest in Anson's assets at the          date of foreclosure (                              i.e., the value Fleet might reasonably expect          to realize were the assets sold and applied to the Anson debt),                                                                         not          the value of the NOL while Anson continued to function as a going          concern. Thus, Mathias effectively conceded that the value of the          Fleet security interest in the NOL was zero.                    b.   Keyman Life Insurance Policy                    Mathias proposed to testify that the keyman insurance          policy Anson owned on the life of a former director was worth $1.2          million. The valuation was derived from a Fleet document assessing                                             The Internal Revenue Code allows NOLs to be carried  back 3          years, and forward 15 years.  See 26 U.S.C. S 172(b).                                         11          Fleet's collateral position, in which the $1.2 million figure          reflected the                        net                            proceeds payable to the beneficiary (                                                               i.e., Fleet)          at the death of the insured.                    The district court correctly concluded that the Mathias          appraisal was patently inflated. As previously noted, the only          material consideration, for present purposes, was the policy's          value at the time Fleet   foreclosed  in October  1993, when the          insured had a life expectancy of seven years and the cash value was          only $62,000. At the very most, therefore, an arm's-length          purchaser would have paid an amount equal to $1.2 million,          discounted to present value.                     Indeed, pressed by the district court, Mathias conceded          that he had not calculated "present value," but then estimated it          at "somewhere in the vicinity of $800,000." Mathias likewise          conceded that he had not taken into account the annual premium          ($75,000) costs for maintaining the policy seven more years,          totaling $525,000. Thus, Mathias effectively conceded that the          policy might fetch only $275,000, some $925,000 below the proffered          valuation. Absent any suggestion that accepted accounting          principles would countenance such deficiencies, the district court          acted well within its discretion in excluding the Mathias valua-          tion.                    As there has been no demonstration that the appraisal          "rest[ed] on a reliable [methodological] foundation,"                                                               Bogosian, 104                                             Although its face value was $1.5 million, the policy had been          pledged to Fleet to secure a $300,000 loan.                                          12          F.3d at 477, 479, with respect to the net operating losses and the          keyman insurance policy, the most optimistic valuation to which          Mathias supportably might have testified was $10,271,500,                                                                   see                                                                       supra          Section II.A.2    $356,500 less than the total Anson indebtedness          to Fleet    even assuming all other property values ascribed by          Mathias were reasonably reliable, such as intangible assets (                                                                      e.g.,          goodwill, trade reputation, going-concern value, etc.) totaling          $1,998,500, see Rev. Rul. 68-609, 1968-2 C.B. 327; the $2,648,000          valuation given Anson's inventory; and the $2,941,000 real estate          valuation.          B.   The Rule 50(a) Judgments on Substantive Claims               1.   Standard of Review                    Judgments entered as a matter of law under Rule 50(a) are          reviewed de novo, to determine whether the evidence, viewed most          favorably to the nonmoving party, Peters, could support a rational          jury verdict in its favor.  See Fed. R. Civ. P. 50(a); Coyante v.          Puerto                  Rico                       Ports                              Auth., 105 F.3d 17, 21 (1st Cir. 1997). Of          course, Peters was not entitled to prevail against the Rule 50(a)          motion absent competent evidence amounting to "'more than a mere          scintilla.'"  Id. (citation omitted).               2.   The Peters Claims                    The gravamen of the substantive claims for relief          asserted by Peters is that Fleet colluded with Considine and          Jacobsen to rid Anson of certain burdensome unsecured debt, thereby          effecting a partial "private bankruptcy" discharge under the guise          of the Fleet foreclosure, which advantaged Considine and Jacobsen                                         13          at the expense of Peters and other similarly situated Anson          unsecured creditors. The Peters proffer included: (1) the March          1993 decision by Fleet to declare Anson in default, which coincided          with the Peters demand for payment from Anson on its sales commis-          sions; (2) the August 1992 decision by Fleet to waive a default          involving a shortfall much larger than the March 1993 default; (3)          the 1993 negotiations with Fleet, in which Considine and Jacobsen          made known their intention that C & J not assume the unsecured debt          Anson owed Peters; (4) the decision to arrange a private foreclo-          sure sale by Fleet, thus ensuring that C & J alone could "bid" on          the Anson operating assets; and (5) the payments made to select          unsecured Anson creditors (                                    i.e., essential trade creditors) only.                     The district court ruled that Peters' failure to          establish that Anson's assets were worth more than its total          indebtedness to Fleet was fatal to all claims for relief. It noted          that, as an unsecured creditor of Anson, Peters was simply experi-          encing a fate common among unsecured creditors who lose out to a          partially                    secured creditor (hereinafter: "undersecured creditor")          which forecloses on their debtor's collateral. As the district          court did not analyze the individual claims for relief, we now turn          to that task.                     a.  Fraudulent Transfer Claims                    Peters first contends that the jury reasonably could have          found defendants' transfer of the Anson assets fraudulent under          R.I. Gen. Laws SS 6-16-1                                   et                                      seq., which provides that a "transfer"          is fraudulent if made "[w]ith actual intent to hinder, delay, or                                         14          defraud any creditor of the debtor."       Id. S 6-16-4(a)(1).          Normally, it is a question of fact whether a transfer was made with          actual intent to defraud. At least arguably, moreover, Peters          adduced enough competent evidence to enable the jury to infer that          defendants deliberately arranged a conveyance of the Anson assets          with the specific intent to leave the Peters claim unsatisfied.          Nonetheless, under the plain language of the Rhode Island statute,          the actual intent of the defendants was immaterial as a matter of          law.                    The statute covers only a "[fraudulent]                                                            transfer made or          obligation incurred by a debtor."     Id. S 6-16-4(a) (emphasis          added). The term "transfer" is defined as "every mode, direct or          indirect, absolute or conditional, voluntary or involuntary, of          disposing of or parting with an asset or an interest in an asset,          and includes payment of money, release, lease, and creation of a          lien or other encumbrance."  Id. S 6-16-1(l). However, the term                                             The Rhode Island fraudulent transfer statute lists eleven          "badges of fraud," from which a factfinder might infer actual          fraudulent intent: "(1) The transfer or obligation was to an          insider; (2) The debtor retained possession or control of the          property transferred after the transfer; (3) The transfer or          obligation was . . . concealed; (4) Before the transfer was made or          [the] obligation was incurred, the debtor had been sued or          threatened with suit; (5) The transfer was of substantially all the          debtor's assets; (6) The debtor absconded; (7) The debtor removed          or concealed assets; (8) The value of the consideration received by          the debtor was [not] reasonably equivalent to the value of the          asset transferred or the amount of the obligation incurred; (9) The          debtor was insolvent or became insolvent shortly after the transfer          was made or the obligation was incurred; (10) The transfer occurred          shortly before or shortly after a substantial debt was incurred;          and (11) The debtor transferred the essential assets of the          business to a lienor who transferred the assets to an insider of          the debtor." R.I. Gen Laws S 6-16-4(b).                                         15          "asset" "does not include . . . (1) Property to the extent it  is          encumbered by a valid lien."  Id. 6-16-1(b) (emphasis added). As          Fleet unquestionably held a valid security interest in all Anson          assets, and Peters did not establish that their fair value exceeded          the amount due Fleet under its security agreement,     see  supra          Section II.A, the Anson property conveyed to C & J did not          constitute an "asset" and no cognizable "transfer" occurred under          section 6-16-4(a). See                                  also                                       Richman v.                                                 Leiser, 465 N.E.2d 796, 798          (Mass. App. Ct. 1984) ("A conveyance is not established as a          fraudulent conveyance upon a showing of a fraudulent intention          alone; there must also be a resulting diminution in the assets of          the debtor available to [unsecured] creditors.").                    b.   The Wrongful Foreclosure Claim and                         Uniform Commercial Code ("UCC") S 9-504                    Peters claimed that Fleet, in combination with the other          defendants, conducted a "wrongful foreclosure" by utilizing its          right of foreclosure as a subterfuge for effectuating Anson's          fraudulent intention to avoid its lawful obligations to certain          unsecured creditors. Thus, Peters contends, Fleet violated its          duty to act in "good faith,"                                       see R.I. Gen. Laws S 6A-1-203 ("Every          contract or duty within title 6A imposes an obligation of good          faith in its performance or enforcement."), thereby entitling          Peters to tort damages. The "good faith" claim likewise fails.                    As Peters adduced no competent evidence that Fleet          concocted the March 1993  default by Anson, it demonstrated no          trialworthy issue regarding whether Anson remained in default at          the time the foreclosure took place in October 1993. Specifically,                                         16          Peters proffered no competent evidence to counter the well-          supported ground relied upon by Fleet in declaring a default under          the 1991 loan restructuring agreement; namely, that Anson failed to          meet its earnings target for 1992. See                                                 supra Section I. Nor is it          material that Fleet had waived an earlier default by Peters in          1992, particularly since Fleet at the time expressly reserved its          right to act on any future default.  See id. Thus, Fleet's legal          right to foreclose was essentially uncontroverted at trial.                    The Peters argument therefore reduces to the proposition          that a secured creditor, with an uncontested right to foreclose          under the terms of a valid security agreement, nonetheless may be          liable on a claim for wrongful foreclosure should a jury find that          the secured creditor exercised its right based in part on a          clandestine purpose unrelated to the default.                                                        But                                                            see                                                                Richman, 465          N.E.2d at 799 ("To be a 'collusive foreclosure,' a foreclosure must          be based on a fraudulent mortgage, or it must be irregularly          conducted so as to claim a greater portion of the mortgagor's          property than necessary to satisfy the mortgage obligation.")          (citations omitted). Since Peters cites    and we have found                                                                          no          Rhode Island case articulating the exact contours of a wrongful          foreclosure claim by an unsecured creditor under R.I. Gen. Laws S          6A-1-203, in the exercise of our diversity jurisdiction we are at          liberty to predict the future course of Rhode Island law.     See          Vanhaaren v. State                              Farm                                   Mut.                                        Auto.                                               Ins.                                                    Co., 989 F.2d 1, 3 (1st          Cir. 1993). Nevertheless, having chosen the federal forum, Peters          is not entitled to trailblazing initiatives under Rhode Island law.                                         17          See Carlton v. Worcester Ins. Co., 923 F.2d 1, 3 (1st Cir. 1991);          Porter v. Nutter, 913 F.2d 37, 40-41 (1st Cir. 1990). Nor do its          citations                       none purporting to apply Rhode Island law                                                                    persuade          us that the Rhode Island courts would countenance the freewheeling          "wrongful foreclosure" claim it advocates.                                             Tellingly, none of the cited cases involved a plaintiff who          had prevailed without demonstrating actual prejudice; that is, that          the secured creditor had neither a present contractual right to          foreclose nor a comprehensive lien claim balance exceeding the          value of the collateral.                We briefly note the more significant distinguishing features          which make the cited authorities inapposite. First, in     Voest-          Alpine Trading USA                            v.                                Vantage Steel Corp.                                                 , 732 F. Supp. 1315, 1324-          25 (E.D. Pa. 1989),                              aff'd, 919 F.2d 206 (3d Cir. 1990), a foreclo-          sure and resale were set aside,  not  as constituting a  wrongful          foreclosure under  the common  law, but under the Pennsylvania          Fraudulent Conveyance Act,  see Pa. Stat. Ann. tit. 39, S 357          (repealed 1993). Moreover, whereas Peters failed to show that the          Anson assets were even arguably worth more than the Anson indebted-          ness to Fleet, see supra Section II.A., in  Voest-Alpine, 732 F.          Supp. at 1322, 1325, where the collateral was worth "at least $1          million" and the $1.5 million secured indebtedness was backed by          personal guarantees of $300,000 as well, the district court          concluded that the plaintiff had been "prejudiced" because it might          have received partial payment had the debtor been forced into a          chapter 7 liquidation or chapter 11 reorganization.                Second, in  Limor                                   Diamonds,                                              Inc. v.  D'Oro                                                              by                                                                  Christopher          Michael, Inc.                      , 558 F. Supp. 709 (S.D.N.Y. 1983), the plaintiff, who          had sold the debtor diamonds without obtaining a perfected purchase          money security interest, sued both the debtor and a secured          creditor which had foreclosed on the debtor's entire inventory,          including the diamonds, as after-acquired property subject to its          perfected security interest. The plaintiff alleged a conspiracy to          convert the diamonds, on the ground that the defendants had induced          the plaintiff to                           deliver the diamonds even as the secured creditor          was poised to foreclose on any after-acquired collateral.  Id. at          711-12. Thus, the species of bad faith alleged in      Limor was          qualitatively different from any involved here, since Peters had          supplied Anson with no goods or assets which could have become          subject to the Fleet security interest.                Third, in Mechanics                                    Nat'l                                          Bank                                               of                                                  Worcester v. Killeen, 384          N.E.2d 1231 (Mass. 1979), a "wrongful foreclosure" claim was upheld          where no default had occurred.   Id. at 1235-36. In the instant          case, of course, there is no suggestion that Peters was not in          default under its loan restructuring agreement with Fleet.                                          18                    Thus, the Peters contention that the jury would need to          delve further into what motivated Fleet to exercise its legitimate          contractual right to foreclose lacks significant foundation in the          cited authorities.  See  also, e.g., E.A.                                                      Miller,                                                              Inc. v.  South          Shore                 Bank, 539 N.E.2d 519, 523 (Mass. 1989) ("The [UCC] defines          '[g]ood faith' as 'honesty in fact in the conduct or transaction          concerned[,]' [and] [t]he essence of bad faith, in this context, is          not the [secured creditor's] state of mind but rather the attendant          bad actions.") (citations omitted). Consequently, Peters is left          to its argument that the Fleet decision to conduct a private          foreclosure sale, rather than solicit potential competing buyers at          a public sale, rendered the foreclosure sale "commercially          unreasonable," in violation of the                                             objective "good faith" require-          ment established in R.I. Gen. Laws S 6A-1-203.                                                         See,                                                              e.g.,                                                                    American          Sav.                &                   Loan                        Ass'n v.  Musick, 531 S.W.2d 581, 587 (Tex. 1975)          (wrongful foreclosure involves irregularities in sale which                                             Finally, Peters relies on   Sheffield                                                       Progressive,                                                                     Inc. v.          Kingston                    Tool                         Co., 405 N.E.2d 985 (Mass. App. Ct. 1980), which          upheld a denial of a motion to dismiss a "collusive foreclosure"          claim that collateral worth over $3 million had been sold in a          private foreclosure sale for only $879,159, the                                                          full amount of the          secured debt. Id. at 987. The decision was based not on a showing          of subjective "bad faith" on the part of the secured creditor,          however, but on an objective determination that if the allegations          were proven true, it would mean that the debtor effectively would          have "released," for no consideration, an unencumbered equity          interest worth over $2 million otherwise available to unsecured          creditors, id., clearly a commercially unreasonable sale.     See          Thomas v. Price, 975 F.2d 231, 239 (5th Cir. 1992);     see  also          Bezanson v. Fleet                             Bank                                  -                                    N.H., 29 F.3d 16, 20-21 (1st Cir. 1994)          (affirming finding of commercial unreasonableness where secured          creditor turned down purchase offer of $3.4 million, which would          have left equity for other creditors). Peters, on the other hand,          failed to prove that Anson had any equity in its operating assets          when Fleet foreclosed.  See supra Section II.A.                                          19          contributed to inadequate price).                     Fleet maintained at trial that its decision to conduct          a private sale was reasonable because the publicity attending a          public sale would frighten off Tiffany's, Anson's principal client,          thereby virtually assuring the failure of any successor company          which acquired the Anson operating assets. Thus, Fleet plausibly          reasoned that the anticipated publicity attending a nonprivate sale          would tend to depress the sales price. Peters, on the other hand,          failed to offer any evidence of commercial unreasonableness which          dealt adequately with the justification relied upon by Fleet.          Rather, Peters relied exclusively upon its proffer of testimony          from Richard Clarke, a former banker who would have testified,          categorically, that private foreclosure sales, at which the secured          creditor solicits no third-party bids, are unreasonable per se.                                             Ultimately, commercial reasonableness poses a question of law,          though its resolution often depends on an assessment of the          constituent facts in dispute, such as the actual circumstances          surrounding the particular sale (e.g., sales price, bid solicita-          tion, etc.). See                            Dynalectron Corp.                                             v.                                                 Jack Richards Aircraft Co.                                                                          ,          337 F. Supp. 659, 663 (W.D. Okla. 1972). The factfinder must          consider all aspects of the disposition, however, as no single          factor, including the sales price, is dispositive.  See Bezanson,          29 F.3d at 20 (N.H. law); RTC v. Carr, 13 F.3d 425, 430 (1st Cir.          1993) (Mass. law).                 Peters now suggests that the district court misunderstood and          oversimplified the Clarke testimony, and that Clarke merely meant          that most reasonable private sales would need to be promoted among          interested third parties   if possible. We have reviewed the          proffered Clarke testimony in its entirety, however, and find no          sound basis for suggesting that the district court abused its          discretion in concluding that it would have confused the jury.                                                                         See          Bogosian, 104 F.3d at 476. In other words, as we see it, a sale in          which third-party bids are actively solicited is not a "private"          sale, at least absent considerations not apparent here.                                          20                    Quite the contrary, however, under the Rhode Island UCC,          private sales are expressly permitted.  See R.I. Gen. Laws 6A-9-          504(3) (noting that "[d]isposition of the collateral may be by          public or  private proceedings . . . but every aspect of the          disposition including the method, manner, time, place, and terms          must be commercially reasonable"). "A sale of collateral is not          subject to closer scrutiny when the secured party chooses to          dispose of the collateral through a private sale rather than a          public sale. Indeed, the official comment to [UCC] section [9-504]          indicates that private sale may be the preferred method of          disposition. . . . The only restriction placed on the secured          party's disposition is that it must be commercially reasonable."          Thomas v. Price, 975 F.2d 231, 238 (5th Cir. 1992). In order to          prove the private foreclosure sale commercially unreasonable,          Peters would have had to demonstrate that the means employed by          Fleet did not comport with prevailing trade practices among those          engaged in the same or a comparable business,   see, e.g., In                                                                          re          Frazier, 93 B.R. 366, 368 (Bankr. M.D. Tenn. 1988),                                                             aff'd, 110 B.R.          827 (M.D. Tenn. 1989), whereas Clarke simply testified that    he          invariably solicited bids in foreclosure sales. Clarke did not          testify that the steps taken by Fleet, confronted in October 1993          with the concern that Tiffany's might withdraw its indispensable          jewelry orders, did not comport with reasonable private foreclosure          practice in such circumstances. As to the latter point, Clarke          simply stated that he did not know.                    Furthermore, though Fleet may have foreclosed for any                                         21          number of subjective reasons, the record indisputably discloses          that it had at least one unimpeachable reason: the uncontested          Anson default under the 1991 loan restructuring agreement.          Consequently, we are not persuaded that the Rhode Island courts          would accept the amorphous "wrongful foreclosure" claim advocated          by Peters in the present circumstances.  See Carlton, 923 F.2d at          3. Accordingly, the wrongful foreclosure claim was properly          dismissed.                    c.   Bulk Transfer Act (UCC S 6-102(1),(2))                     Peters alleged that the sale of all Anson operating          assets to C & J constituted a "bulk transfer" under the Rhode          Island Bulk Transfer Act, see R.I. Gen. Laws SS 6A-6-101, et seq.          ("BTA"),  and that the admitted failure to give prior notification          to other Anson creditors violated the BTA notice provision, thus          entitling Peters to treat the entire transfer as "ineffective,"                                                                         id.          S 6A-6-105. Defendants counter that the asset sale fell within an          express BTA exemption because it was nothing more than a          "[t]ransfer[] in settlement or realization of a lien or other                                              Of course, were Fleet found to have foreclosed on the Anson          assets solely to assist Considine and Jacobsen in defrauding          certain of Anson's unsecured creditors, the foreclosure could prove          less fruitful than Fleet supposed.  See infra Section II.B.2(d).          But that is an entirely different question than whether Fleet would          be liable in tort under Rhode Island law.                A "bulk transfer" is "any transfer in bulk and not in the          ordinary course of the transferor's business of a major part of the          materials, supplies, merchandise, or other inventory, . . . [as          well as] a substantial part of the equipment . . . if made in          connection with a bulk transfer of inventory." Id. S 6A-6-102(1),          (2).                                         22          security interests [ viz., Fleet's   undersecured claim against          Anson]." Id. S 6A-6-103(3);                                       cf.                                           supra Section II.B.2(a) (compara-          ble "lien" exception under fraudulent transfer statute).                    Parry for thrust, relying on                                                Starman v.                                                           John Wolfe, Inc.                                                                          ,          490 S.W.2d 377 (Mo. Ct. App. 1973), Peters argues that defendants          are not entitled to claim the "lien" exemption under S          6A-6-103(3).  Peters contends,   inter alia, that the first and          third prongs in the                              Starman test were not met here. It argues that          though Fleet declared a loan default in March 1993, its loan          officers conceded at trial that Fleet had waived more serious          defaults in the recent past and that it had not reassessed whether          Anson was still in default in October 1993,                                                     i.e., at the time Fleet          foreclosed. Second, some of the purchase monies C & J paid for the          Anson assets were not applied to Fleet's secured claim against          Anson. For example, Fleet increased the purchase price for Anson's          assets to cover approximately $322,000 in outstanding checks, drawn                                              In Starman, an automobile dealership owed approximately          $60,000 to a bank, which held a security interest in all dealership          assets, and owed plaintiff Starman a $3,300 unsecured debt. On its          own initiative, the dealership sold its entire business for $74,000          to third parties, who directly paid the bank's security interest in          full, then paid over the remaining $14,000 to two other creditors          of the dealership. The court held that a transferee must make          three factual showings to qualify for the "lien" exemption under          BTA S 103(3): (1) the transferor defaulted on a secured debt, and          its secured creditor had a present right to foreclose on the          transferor's assets to satisfy its lien; (2) the transferor          conveyed the collateral                                  directly to the secured party, rather than          a third party;                         and (3) the secured party applied                                                           all sale proceeds          to the transferor's debt, rather than remitting part of the          proceeds preferentially to some (but less than all) of the          transferor's other unsecured creditors.                                                  See                                                      Starman, 490 S.W.2d at          382-83. The Missouri court found that the transferor and          transferees had satisfied none of these criteria.  Id.                                         23          on Anson's checking account with Fleet and made payable to Anson's          trade creditors. Further, as a term of the asset sale, Fleet          funnelled half a million dollars in "new capital" back into the          newly created business entity, which C & J then used to pay off          certain trade debts it had assumed from Anson. Both transactions          violated Starman's third     or anti-preference      prong, says          Peters, because some, but not all, Anson unsecured creditors were          paid with cash not used to reduce or extinguish the $10,628,000          Fleet debt. We cannot agree.                    Starman poses no bar to defendants' "lien" exemption          claim under U.C.C. S 6A-6-103(3). First, as we have noted,    see          supra Section II.B.2(b), Fleet declared the loan default in March          1993 because Anson had failed to achieve its earnings target for          1992. Thus, the very nature of the default meant that it could not          be cured at any time after December 31, 1992, by which time 1992          year-end earnings were a fait accompli. Under the terms of the          loan restructuring agreement, therefore, Fleet had the unilateral          right to foreclose on the collateral. Furthermore, the previous          Fleet waivers of default were immaterial to the question whether          Fleet had a right to foreclose in October 1993, as the default it          expressly declared in March 1993 was never waived.                     Second, the circumstances surrounding the Peters claim          remove it from under the third                                         Starman prong.  In  Starman, and in                                              We hasten to add, however, that Fleet incorrectly suggests          that the Missouri Court of Appeals later "negated" its    Starman          holding in Techsonic Indus., Inc. v. Barney's Bassin' Shop, Inc.,          621 S.W.2d 332 (Mo. Ct. App. 1981). Rather,  Techsonic jettisoned                                         24          later cases applying its third prong,    see,  e.g.,  Mid-America          Indus.,                   Inc. v. Ketchie, 767 P.2d 416, 418-19 (Okla. 1989), the          sale proceeds were more than sufficient to satisfy the secured          claim in full, leaving excess proceeds. The BTA is designed to          prevent transferors                                 like Anson                                               from liquidating their assets          without notice to their creditors, and retaining the proceeds.          Here, however, the sale price paid by C & J did not exceed the          amount due Fleet on its secured claim,                                                 see                                                     supra Section II.A, and          Fleet therefore was entitled to apply the entire purchase price          toward the Anson indebtedness. That Fleet chose to devote a          portion of the sale proceeds to certain Anson trade creditors did          not implicate Starman's third prong since those monies were never                                        only the second prong in the Starman test. A transferee would be          exempt from the BTA even if the transferor conveyed the bulk assets          to a third party, rather than to its secured creditor, so long as          all sale proceeds were applied to the secured debt. The court          rejected the proposition that the BTA requires the secured creditor          and transferee to proceed with the empty formalities of a bifurcat-          ed transfer (i.e., passing the assets from transferor to secured          creditor, from secured creditor to third-party transferee) in order          to claim the "lien exemption." Importantly, however, the                                                                   Techsonic          defendants had applied all sale proceeds to the secured debt, see          id. at 334 ("[A]ll proceeds went to the bank."), and the                                                                   Techsonic          court therefore had no occasion to reconsider    Starman's third          "anti-preference" criterion. Further, other courts have since          acknowledged the continuing efficacy of the third prong in                                                                    Starman.          See,               e.g.,                     Mid-America Indus., Inc.                                             v.                                                 Ketchie, 767 P.2d 416, 418-          19 (Okla. 1989) (transfer not exempt where "only a portion of the          proceeds of the sale was paid to the secured creditor"); see also          Ouachita Elec. Coop. Corp.                                    v.                                        Evans-St. Clair                                                     , 672 S.W.2d 660, 176-          77 (Ark. Ct. App. 1984) (finding transfer exempt where all proceeds          were applied to secured debts, but expressly distinguishing                                                                     Starman          on ground that defendants had not applied all sales proceeds to          secured debt); Schlussel v. Emmanuel                                                Roth                                                     Co., 637 A.2d 944, 955          n.5 (N.J. Super. Ct. App. Div. 1994) (in dicta, endorsing                                                                   Starman's          partial-proceeds rule);   American                                                 Metal                                                        Finishers,                                                                    Inc. v.          Palleschi, 391 N.Y.S.2d 170, 173 (App. Div. 1977) (same);                                                                    Peerless          Packing                   Co. v. Malone                                 &                                   Hyde,                                          Inc., 376 S.E.2d 161, 164 (W. Va.          1988).                                         25          "excess" proceeds. Thus, the district court properly dismissed the          BTA claim.                    d.   Successor Liability                    Next, Peters invokes the "successor liability" doctrine,          by contending that C & J is simply Anson reorganized in another          guise, and therefore answerable in equity for Anson's outstanding          liabilities, including the $859,068 debt due Peters in sales          commissions. See                            H.J. Baker & Bro.                                             v.                                                Orgonics, Inc.                                                             , 554 A.2d 196          (R.I. 1989).                    Under the common law, of course, a corporation normally          may acquire another corporation's assets without becoming liable          for the divesting corporation's debts.  See id. at 205; see  also          National Gypsum Co.                             v.                                 Continental Brands Corp.                                                        , 895 F. Supp. 328,          333 (D. Mass. 1995); 15 William M. Fletcher,                                                      Fletcher Cyclopedia of          Law               of                  Private                          Corporations S 7122, at 231 (1991) [hereinafter:          "Fletcher"]. But since a rigid nonassumption rule can be bent to          evade valid claims, the successor liability doctrine was devised to          safeguard disadvantaged creditors of a divesting corporation in          four circumstances. An acquiring corporation may become liable          under the successor liability doctrine for the divesting          corporation's outstanding liabilities if: (1) it expressly or          impliedly assumed the divesting entity's debts; (2) the parties          structured the asset divestiture to effect a                                                      de                                                         facto merger of the          two corporations; (3) the divesting corporation transferred its          assets with actual fraudulent intent to avoid, hinder, or delay its          creditors; or (4) the acquiring corporation is a "mere continua-                                         26          tion" of the divesting corporation.  See H.J.                                                         Baker, 554 A.2d at          205 (citing, with approval, "mere continuation" test set forth in          Jackson v.                     Diamond T. Trucking Co.                                           , 241 A.2d 471, 477 (N.J. Super.          Ct. Law Div. 1968) (recognizing, as distinct exceptions, both the          "actual fraud" and "mere continuation" tests)); Cranston                                                                     Dressed          Meat                Co. v. Packers                               Outlet                                      Co., 57 R.I. 345, 348 (1937) (noting          that nonassumption rule applies only "in the absence of fraud");          see also Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182 n.5          (1973);                  Western Auto Supply Co.                                         v.                                             Savage Arms, Inc.                                                              (                                                               In re Savage          Indus., Inc.), 43 F.3d 714, 717 n.4 (1st Cir. 1994); Philadelphia          Elec. Co. v. Hercules, Inc., 762 F.2d 303, 308-09 (3d Cir. 1985);          Fletcher, at S 7122. This case implicates the third and fourth          successor liability tests.                     The district court dismissed the instant successor          liability claim on the ground that Peters could not have been          prejudiced, because Fleet had a legitimate right to foreclose and          Peters did not prove the Anson assets were worth more than the          total Anson indebtedness to Fleet. On appeal, C & J takes          essentially the same position, but with the flourish that the          successor liability doctrine is inapplicable   per  se where the          divesting corporation's assets were acquired pursuant to an          intervening foreclosure, rather than a direct purchase.  See R.I.          Gen. Laws S 6A-9-504(4) ("When collateral is disposed of by a          secured party after default, the disposition transfers to a          purchaser for value all of the debtor's rights therein and          discharges the security interest under which it is made and any                                         27          security interest or lien subordinate thereto. The purchaser takes          free of all such rights and interests . . . .") (emphasis added).          We do not agree.                    First and foremost, existing case law overwhelmingly          confirms that an intervening foreclosure sale affords an acquiring          corporation no automatic exemption from successor liability. See,          e.g.,                Glynwed, Inc.                             v.                                 Plastimatic, Inc.                                                 , 869 F. Supp. 265, 273-75          (D.N.J. 1994) (collecting cases); Asher v.  KCS                                                           Int'l,                                                                  Inc., 659          So.2d 598, 600 (Ala. 1995);  G.P.                                             Publications,                                                           Inc. v.  Quebecor          Printing-St.                        Paul,                              Inc., 481 S.E.2d 674, 679-80 (N.C. Ct. App.          1997);                 see                     also                          Upholsterers' Int'l Union Pension Fund                                                                v.                                                                    Artistic          Furniture                     of                        Pontiac, 920 F.2d 1323, 1325, 1327 (7th Cir. 1990).          Nor has C & J cited authority supporting its position.                     Second, by its very nature the foreclosure process cannot          preempt the successor liability inquiry. Whereas liens relate to          assets (viz., collateral), the indebtedness underlying the lien          appertains to a person or legal entity (viz., the debtor). Thus,          although foreclosure by a senior lienor often wipes out junior-lien          interests in the same collateral,   see, e.g.,  Levenson v.  G.E.          Capital                   Mortgage                            Servs.,                                    Inc., 643 A.2d 505, 512 (Md. Ct. Spec.          App. 1994), rev'd on other grounds, 657 A.2d 1170 (Md. 1995), it          does not discharge the debtor's underlying obligation to junior          lien creditors. See,                                e.g.,                                     Trustees of MacIntosh Condominium Ass'n          v.             FDIC, 908 F. Supp. 58, 64 (D. Mass. 1995) ("'As a result of the          first mortgage foreclosure the second mortgage lien was extin-          guished but not the second mortgage debt.'") (quoting Osborne v.                                         28          Burke, 300 N.E.2d 450, 451 (Mass. App. Ct. 1973)). As one might          expect, therefore, UCC S 9-504 focuses exclusively on the effect a          foreclosure sale has upon subordinate liens, see R.I. Gen. Laws S          6A-9-504(4),                       supra, rather than any extinguishment of the underly-          ing indebtedness. Whereas the successor liability doctrine focuses          exclusively on debt extinguishment, be the debt secured or unse-          cured.                      Following the October 1993 foreclosure sale by Fleet, the          then-defunct Anson unquestionably remained legally obligated to          Peters for its sales commissions, even if the lack of corporate          wherewithal rendered the obligation unenforceable as a practical          matter. True, Fleet might have sold the Anson assets to an entity          with no ties to Anson, but that is beside the point, since the          Peters successor liability claim alleges that C & J  is Anson in          disguise. As Peters simply seeks an equitable determination that          C & J, as Anson's successor, is liable for the sales commissions                                              It is for this reason that the successor liability doctrine          often proves problematic in bankruptcy proceedings. In contrast to          UCC S 9-504, the Bankruptcy Code expressly permits sales free and          clear of liens, and  of any other " interest" in the collateral.          See, e.g., 11 U.S.C. S 363(f) ("The trustee may sell property . .          . free and clear of   any interest in such property . . . .")          (emphasis added); S 727 (discharge in liquidation); S          1141(d)(discharge in reorganization). Thus, arguably at least,          such "interest[s]" might be thought to encompass successor          liability claims by unsecured creditors. But                                                        see,                                                             e.g.,                                                                   Wilkerson          v.             C.O. Porter Mach. Co.                                 , 567 A.2d 598, 601-02 (N.J. Super. Ct. Law          Div. 1989) (finding successor liability doctrine applicable          notwithstanding entry of S 363 order). Unlike a bankruptcy court,          however, a secured creditor and its nonbankrupt debtor lack the          power    either at common law or by statute         to effect a          discharge of underlying third-party debts, even for the most          beneficent of reasons.                                         29          Peters earned from Anson,                                    see                                        Glynwed, 869 F. Supp. at 274-75, its          claim in no sense implicates any lien interest in any former Anson          asset.    Third, successor liability is an equitable doctrine, both          in origin and nature.  See, e.g., Chicago                                                     Truck                                                           Drivers,                                                                     Helpers          and               Warehouse                         Workers                                  Union                                        (Indep.)                                                 Pension                                                          Fund v.  Tasemkin,          Inc., 59 F.3d 48, 49 (7th Cir. 1995);                                               The Ninth Ave. Remedial Group          v. Allis-Chalmers Corp., 195 B.R. 716, 727 (N.D. Ind. 1996) ("The          successor doctrine is derived from equitable principles . . . .");          Stevens v. McLouth                              Steel                                    Prods.                                           Corp., 446 N.W.2d 95, 100 (Mich.          1989); Uni-Com                          N.W.,                                Ltd. v. Argus                                              Publ'g                                                     Co., 737 P.2d 304, 314          (Wash. Ct. App. 1987). Moreover, the UCC, as adopted in Rhode          Island, see R.I. Gen. Laws S 6A-9-103, provides that generally          applicable principles of equity, unless expressly preempted, are to          supplement its provisions.  See G.P.                                                Publications, 481 S.E.2d at          680; see also Ninth                               Dist.                                     Prod.                                           Credit                                                  Ass'n v. Ed                                                              Duggan,                                                                       Inc.,          821 P.2d 788, 794 (Colo. 1991) (en banc);     see also  Sheffield          Progressive, Inc.                           v.                               Kingston Tool Co.                                               , 405 N.E.2d 985, 988 (Mass.          App. Ct. 1980) (UCC Article 9 does not preempt Uniform Fraudulent          Conveyance Act). Moreover, R.I. Gen. Laws S 6A-9-504 neither          explicitly nor impliedly preempts the successor liability doctrine.                    Finally, the fact that C & J acquired the Anson assets          indirectly through Fleet, rather than in a direct sale from Anson,          does not trump the successor liability doctrine as a matter of law,          since equity is loath to elevate the form of the transfer over its          substance, and deigns to inquire into its true nature.        See          Glynwed, 869 F. Supp. at 275 (collecting cases);                                                          G.P. Publications                                                                          ,                                         30          481 S.E.2d at 679-80; see  also Bangor                                                  Punta                                                        Operations,                                                                    Inc. v.          Bangor                  &                    Aroostook                               R.                                  Co., 417 U.S. 703, 713 (1974) ("In such          cases, courts of equity, piercing all fictions and disguises, will          deal with the substance of the action and not blindly adhere to the          corporate form."); Young v. Higbee                                              Co., 324 U.S. 204, 209 (1945)          (same); Henry                         F.                             Mitchell,                                        Co. v.  Fitzgerald, 231 N.E.2d 373,          375-76 (Mass. 1967) (same). Thus, were C & J otherwise qualified          as Anson's "successor" under Rhode Island law, because its          principals acted with intent to evade the Peters claim,                                                                  see                                                                      infra,          there would be no equitable basis for treating the asset transfer          by foreclosure differently than a direct transfer from Anson to C          & J.  See A.R. Teeters                                  &                                    Assocs.,                                             Inc. v. Eastman                                                             Kodak                                                                   Co., 836          P.2d 1034, 1039 (Ariz. Ct. App. 1992) ("Successor liability is          based upon the theory 'that the assets of a private corporation          constitute a trust fund for the benefit of its creditors . . . .'")          (citation omitted). Consequently, we reject the contention that C          & J's acquisition of Anson's assets through the Fleet foreclosure          pursuant to R.I. Gen. Laws S 6A-9-504, warranted dismissal of the          successor liability claim as a matter of law.                     Thus, Peters was entitled to attempt to prove that C & J,          as Anson's "successor," became liable for the Anson debt to Peters          because C & J is a "mere continuation" of the divesting corporate          entity.  See Nissen Corp. v. Miller, 594 A.2d 564, 566 (Md. 1991)          ("'The [mere continuation] exception is designed to prevent a          situation whereby the specific purpose of acquiring assets is to          place those assets out of reach of the predecessor's creditors. In                                         31          other words, the purchasing corporation maintains the same or          similar management and ownership but wears a "new hat."'")          (citation omitted). The "mere continuation" determination turns          upon factfinding inquiries into five emblematic circumstances: (1)          a corporation transfers its assets; (2) the acquiring corporation          pays "less than adequate consideration" for the assets; (3) the          acquiring corporation "continues the [divesting corporation's]          business"; (4) both corporations share "at least one common officer          who [was] instrumental in the transfer"; and (5) the divesting          corporation is left "incapable of paying its creditors." See H.J.          Baker, 554 A.2d at 205 (adopting,                                           inter                                                 alia, the factors set forth          in Jackson, 241 A.2d at 477).                     C & J relies heavily, indeed almost exclusively, on                                                                       Casey          v.             San-Lee Realty, Inc.                                , 623 A.2d 16 (R.I. 1993), wherein the Rhode          Island Supreme Court identified five factual considerations which          contradicted the contention that San-Lee Realty was a "successor"          corporation.   Id. C & J then argues that all five factual          considerations in  Casey appertain here. By disregarding the          distinctive procedural posture in which the                                                      Casey appeal presented          itself, however, C & J fundamentally misdirects its reliance.                    Unlike the judgment as a matter of law at issue here, the          Casey court affirmed a judgment entered for the defendants          following a bench trial in which the trial judge made factual          findings directly pertinent to the "mere continuation" theory.                                                                         See          id. at 19 ("The findings of fact made by a trial justice, sitting          without a jury, are to be given great weight."). Thus,      Casey                                         32          provides no support for the proposition that the particular factual          considerations credited by the trial court, qua factfinder, would          permit a trial court, sitting with a jury, to enter judgment as a          matter of law.                     We emphasize the misplaced reliance on Casey because it          points up the fundamental flaw underlying the Rule 50 dismissal          below. The   Baker court was careful to note that the "mere          continuation" inquiry is multifaceted, and normally requires a          cumulative, case-by-case assessment of the evidence by the          factfinder.  See H.J.                                 Baker, 554 A.2d at 205;  see also  Cranston          Dressed                   Meat, 57 R.I. at 350 (affirming judgment for plaintiff          based on findings of fact); Steel                                             Co. v. Morgan                                                           Marshall                                                                     Indus.,          Inc., 662 N.E.2d 595, 600-01 (Ill. App. Ct. 1996) (trialworthy          issue of fact precluded directed verdict);      Burgos v.   Pulse          Combustion, Inc.                         , 642 N.Y.S.2d 882, 882-83 (App. Div. 1996);                                                                      Bryant          v. Adams, 448 S.E.2d 832, 839-40 (N.C. Ct. App. 1994) ("mere          continuation" inquiry implicates issues of fact precluding summary          judgment); Bagin v. IRC Fibers Co., 593 N.E.2d 405, 408 (Ohio Ct.          App. 1991) (genuine issue of fact relating to "mere continuation"          inquiry precluded summary judgment for defendant);                                                            cf.                                                                Dickinson v.          Ronwin, 935 S.W.2d 358, 364 (Mo. Ct. App. 1996) ("Although none of          the badges of fraud existing alone establishes fraud, a concurrence          of several of them raises a presumption of fraud.").                    Thus, although a Rule 50 dismissal may be warranted where          the trial court has determined the evidence insufficient to permit          a rational jury to find for the plaintiff, we are not presented                                         33          with such a case. Rather, viewed in the light most favorable to          Peters, see Fed. R. Civ. P. 50(a);  Coyante, 105 F.3d at 21, its          evidentiary proffer generated a trialworthy issue of material fact          respecting all five factual inquiries identified in                                                              H.J. Baker                                                                       , as          we shall see.                         (i)  "Transfer" of Assets                    Anson transferred all its   operating  assets, thereby          enabling C & J to continue the identical product line without          interruption.  H.J.                               Baker, 554 A.2d at 205. C & J nonetheless          contends that a cognizable "transfer" could not have occurred,          because Anson did not convey all its assets to C & J; that is, it          conveyed its real property to Little Bay Realty.  See Casey, 623          A.2d at 19 (finding no transfer where,     inter  alia, not all          corporate assets were conveyed). We disagree.                    Under the first                                    Baker criterion, the plaintiff need only          demonstrate "a transfer of corporate assets."                                                        H.J. Baker                                                                 , 554 A.2d          at 205. That is, it is not necessary, as a matter of law, that a          single corporation acquire all the divesting corporation's assets,          though the relative inclusiveness of any such asset transfer may                                              Since the district court judgment must be vacated in any          event, we assume  arguendo that Rhode Island law would require          Peters to make adequate showings on all five Baker factors, even          though Baker expressly adopted the New Jersey model for the "mere          continuation" test, under which "[n]ot all of these factors need be          present for a de facto merger or continuation to have occurred."          Luxliner P.L. Export, Co.                                   v.                                       RDI/Luxliner, Inc.                                                       , 13 F.3d 69, 73 (3d          Cir. 1993) (citing Good v. Lackawanna                                                 Leather                                                         Co., 233 A.2d 201,          208 (N.J. Super. Ct. 1967)). Indeed, the  Baker court itself did          not even discuss the "inadequate consideration" element in arriving          at its determination that the acquiring company qualified as a          "successor."  See H.J. Baker, 554 A.2d at 205.                                         34          prove to be a very pertinent factual consideration which the          factfinder would take into account in the                                                    overall mix.  Cf.                                                                      Casey,          623 A.2d at 19 (noting that divesting corporation conveyed only          three-fifths of its assets). In this respect,  Baker accords with          the law in other jurisdictions.                                          See,                                               e.g.,  G.P. Publications                                                                      , 481          S.E.2d at 679 (successor liability doctrine concerns "the pur-          chase[] of all or                            substantially                                          all the assets of a corporation");          cf. Dickinson, 935 S.W.2d at 364 (recognizing, as badge of fraud,          "the transfer of all or   nearly all of the debtor's property")          (emphasis added); supra note 7.                     Yet more importantly, however, this is not an instance in          which the divesting corporation transferred its real estate to a          third corporation which was beyond the  de  facto control of the          principals of the corporation which acquired the operating assets.          Considine and Jacobsen deliberately structured the overall          transaction so as to keep the Anson operating assets and real          property under the ownership of two separate entities, C & J and          Little Bay Realty respectively, concurrently established and          controlled by them. Once again, therefore, since the successor          liability doctrine is equitable in nature, it is the substance of          the overall transaction which controls, rather than its form. See          Glynwed, 869 F. Supp. at 275. Thus, the fact that C & J leased the          real property from Little Bay is not controlling, since C & J                                              Rather, the ostensible purpose was to immunize Little Bay          from a possible C                              &                                J failure, which likewise explains why the          October 1993 agreement contemplated no cross-collateralization.                                          35          (through Considine and Jacobsen) retained de facto control of the          former Anson real estate following its transfer to Little Bay.          See,               e.g.,  H.J. Baker                               , 554 A.2d at 205 (focusing on fact that two          companies "operated from the same manufacturing plant," not on          whether they both owned the premises). Accordingly, viewing the          evidence in the light most favorable to Peters, we cannot conclude,          as a matter of law, that no cognizable "transfer" occurred.                          (ii) "Inadequate Consideration"                    Peters likewise adduced sufficient evidence from which a          rational jury could conclude that the operating assets were          transferred to C & J for "inadequate consideration."    Id. The          second Baker factor rests on the theory that inadequate consider-          ation is competent circumstantial evidence from which the          factfinder reasonably may infer that the transferor harbored a          fraudulent intent to evade its obligations to creditors.     See,          e.g., Ricardo                         Cruz                              Distribs.,                                         Inc. v.  Pace                                                       Setter,                                                               Inc., 931 F.          Supp. 106, 110 (D.P.R. 1996) ("a fraudulent transfer of property          from the seller to the buyer, evinced by inadequate consideration          for the transfer"); Casey Nat'l Bank v. Roan, 668 N.E.2d 608, 611          (Ill. App. Ct.) ("Proof of fraud in fact requires a showing of an          actual intent to hinder creditors, while fraud in law presumes a          fraudulent intent when a voluntary transfer is made for no or          inadequate consideration and directly impairs the rights of          creditors."),                        appeal                               denied, 675 N.E.2d 631 (1996);                                                              cf.                                                                  Dickinson,          935 S.W.2d at 364 (recognizing "inadequacy of consideration" as          badge of fraud);  supra note 7. On the other hand, a valuable                                         36          consideration negotiated at arm's-length between two distinct          corporate entities normally is presumed "adequate," particularly if          the divesting corporation's creditors can continue to look to the          divesting corporation and/or the sales proceeds for satisfaction of          their claims.  See A.R.                                   Teeters, 836 P.2d at 1040; see also  Arch          Mineral Corp. v. Babbitt, 894 F. Supp. 974, 986 n.11 (S.D. W. Va.          1995) (one inquiry is whether divesting corporation       retains          sufficient assets from which to satisfy creditor claims),  aff'd,          104 F.3d 660 (1997);                               Eagle Pac. Ins. Co.                                                 v.                                                     Christensen Motor Yacht          Corp., 934 P.2d 715, 721 (Wash. Ct. App. 1997) (inquiring whether          divesting corporation is "left unable to respond to [the]          creditor's claims").                    The total consideration for all Anson assets in this case          was less than $500,000. Fleet effectively wrote off its outstand-          ing balances ($10,628,000) on the Anson loan in 1993, and provided          C & J and Little Bay Realty "new" financing totaling approximately          $2.9 million.   See Fleet Credit Memo (10/14/93), at 4 ("This          [agreement] is to involve forgiveness of some of [Fleet's] legal          balance in conjunction with a significant equity injection.")          (emphasis added). Thus, though normally loans obtained by buyers          to finance asset acquisitions would be considered in calculating          the total consideration paid, here the two newly-formed acquiring                                              Because the conveyances to C & J and Little Bay allegedly          comprised part of an integrated scheme to defraud certain Anson          creditors, we weigh the total consideration involved in both          transactions. Our conclusion would be precisely the same, however,          were we to consider only the operating-assets sale to C & J.                                         37          companies actually incurred no "new" indebtedness to Fleet. In          fact, if the two companies were determined to be Anson's "succes-          sors," the asset sale would have gained them loan forgiveness          approximating $7.728 million (                                       i.e., $10,628,000, less new indebted-          ness of only $2.9 million), given their total exoneration from          Anson's preexisting indebtedness to Fleet. Since the "new" Fleet          loans cannot count as "consideration," at least as a matter of law,          C & J and Little Bay paid a combined total of only $1 million in          additional cash consideration for the Anson operating assets and          real estate, of which $550,000 was immediately reinjected into the          two acquiring companies for capital improvements and debt service.          See supra Section I. As a practical matter, therefore, C & J and          Little Bay acquired all the Anson assets for only $450,000.                      Although Peters utterly failed to demonstrate that the          Anson assets were worth as much as $12,738,000, see supra Section          II.A., it nevertheless adduced competent evidence as to their          minimum value. Thus, the trial record would support a rational          inference that the assets transferred by Anson had a fair value of          just under $4 million. Fleet documents indicate that the book                                              The district court implied that the fact that Considine and          Jacobsen injected new capital into the two acquiring companies was          dispositive of the "mere continuation" inquiry. We cannot agree,          however, that an injection of new capital at these minimal levels          precluded a finding of fraudulent intent as a matter of law.          Rather, assuming the reconfigured business were to escape,  inter          alia, the $859,068 debt due Peters, the $450,000 invested by          Considine and Jacobsen could be considered quite a bargain.          Finally, the remaining $550,000 in new capital was directed back          into the C & J and Little Bay coffers, where it served as an          immediate benefit to Considine and Jacobsen, not a detriment.                                         38          value of the operating assets approximated $5.2 million; Fleet's          conservative estimate of their value approximated $2.11 million;          and its conservative valuation of the real property was $1.78          million. Therefore, with a total                                           minimum asset value just under $4          million, and a de facto purchase price below $500,000, a rational          jury could conclude that C & J and Little Bay acquired the Anson          assets at 12.5 cents on the dollar.                    At these minimal levels, adequacy of consideration          presents an issue for the factfinder.  See Nisenzon v.  Sadowski,          689 A.2d 1037, 1042-43 (R.I. 1997) (under R.I. fraud conveyance          statute, adequacy of consideration is for factfinder, and review-          able only for clear error); see  also Pacific                                                         Gas                                                             &                                                               Elec.                                                                     Co. v.          Hacienda Mobile Home Park, 119 Cal. Rptr. 559, 566 (Cal. Ct. App.          1975) ("Adequacy of consideration is a question of fact to be          determined by the trier of fact.");  Gaudio v.  Gaudio, 580 A.2d          1212, 1221 (Conn. App. Ct. 1990) ("[T]he adequacy of the consider-          ation in an action to set aside a fraudulent conveyance is an issue          of fact.");                      Textron Fin. Corp.                                        v.                                           Kruger, 545 N.W.2d 880, 884 (Iowa          Ct. App. 1996) ("We refrain, however, from adopting any mathemati-          cal rules to determine the adequacy of consideration. All the          facts and circumstances of each case must be considered."). On the          present record, therefore, it was error to determine as a matter of          law that no rational factfinder could conclude that 12.5% of fair          value was "inadequate" consideration for the Anson assets.   See,          e.g., Miner v. Bennett, 556 S.W.2d 692, 695 (Mo. Ct. App. 1977)          ("The assumption by the grantees of the mortgages in an amount                                         39          equal to approximately                                 one                                     fourth of the value of the property was          not an adequate consideration for the transfer.") (emphasis added).                    Moreover, even assuming                                            arguendo that the circumstantial          evidence of fraudulent intent presented by Peters, in the way of          demonstrating "inadequate consideration," could not have survived          the Rule 50(a) motion for judgment as a matter of law, Peters          adduced competent direct evidence of actual fraudulent intent as          well. Actual fraud is a successor liability test entirely indepen-          dent of the circumstantial "mere continuation" test.    See  H.J.          Baker, 554 A.2d at 205 (describing "mere continuation" test as          "[a]n exception," not as "the" exception, to the general rule of          "nonassumption"; citing, with approval, Jackson, 241 A.2d at 477,          which recognized the "actual fraud" test as distinct from the "mere          continuation" test, see id. at 475);   Cranston                                                           Dressed                                                                   Meat, 57          R.I. at 348 (noting that "nonassumption" presumption applies only          "in the absence of fraud");  see  also Joseph                                                         P.                                                             Manning                                                                     Co. v.          Shinopoulos, 56 N.E.2d 869, 870 (Mass. 1944) (UFCA case) ("[A]t          common law, if the conveyance is made and received for the purpose          of hindering, delaying or defrauding creditors it is fraudulent and          can be set aside without regard to the nature or amount of          consideration."); Eagle                                   Pacific, 934 P.2d at 721 (noting that,          besides the separate "mere continuation" theory, "[s]uccessor          liability may also be imposed where the transfer of assets is for          the fraudulent purpose of escaping liability").                                              Baker focused on the "mere continuation" test simply because          there was no evidence of actual fraudulent intent.                                         40                    Peters adduced   direct evidence that Considine and          Jacobsen entered into the asset transfer with the specific intent          to rid the business of all indebtedness due entities not essential          to its future viability, including in particular the Peters sales          commissions. Peters notified Anson in March 1993 that it intended          to pursue Anson vigorously for payment of its sales commissions.          See Dickinson, 935 S.W.2d at 364 (recognizing, as badge of fraud,          "transfers in anticipation of suit or execution"); supra note 7.          The intention to evade the Peters debt is explicitly memorialized          in Jacobsen's notes, and yet more explicitly in the May 5, 1993          memo from Considine to Fleet ("If Fleet can find a way to foreclose          the company [                      viz., on its security interests in Anson's real estate          and operating assets] and sell certain assets to our company that          would eliminate most of the liabilities discussed above, then we          would offer Fleet . . . $3,250,000."). Thereafter, Fleet          presciently forewarned Considine that its counsel was "not          convinced that you will be able to do this [i.e., shed the Peters          debt] without inviting litigation," and then insisted on an          indemnification clause from C & J should any such litigation          eventuate,                     see Credit Agreement q 8.10 (Oct. 26, 1993). Moreover,          it is immaterial whether Considine believed that this evasive          maneuver was essential to ensure the solvency and success of the          Anson business; fraudulent intent need not be malicious.      See          Balzer & Assocs., Inc. v. The Lakes on 360, Inc., 463 S.E.2d 453,          455 (Va. 1995) ("[M]alicious intent is not an element required to                                         41          prove the voidability of the transfer.").                         (iii) " Continuation of Business"                    Furthermore, Peters proffered ample evidence on the third          factor in the                        Baker test, by demonstrating that C & J did "continue          [Anson's] business."   H.J.                                       Baker, 554 A.2d at 205. Among the          considerations pertinent to the business continuity inquiry are:          (1) whether the divesting and acquiring corporations handled          identical products; (2) whether their operations were conducted at          the same physical premises; and (3) whether the acquiring corpora-          tion retained employees of the divesting corporation.                                                                See                                                                    id.;                                                                         see          also Bagin, 593 N.E.2d at 407 ("The gravamen of the 'mere          continuation' exception is whether there is a continuation of the          corporate entity. Indicia of the continuation of the corporate          entity would include the same employees, a common name, the same          product, the same plant.") (citation omitted).                     C & J was incorporated in October 1993 for the specific          purpose of acquiring the assets of the then-defunct Anson.    See          Asher, 659 So.2d at 599-600 (noting relevance of fact that                                              Once again in mistaken reliance on Casey, C & J points out          that the  Casey court found no evidence of fraudulent intent.          However, that determination was based on a finding that the          original transferor had no knowledge of the plaintiff's potential          lawsuit at the time of the asset transfer; hence, could not have          effected the transfer with fraudulent intent to evade the debt it          owed the plaintiff.  See Casey, 623 A.2d at 19. The  Casey court          expressly noted, however, that "the consideration in this case          would not have validated a transfer of assets if the transfer were          made with notice of the existence of a claim of a creditor."  Id.          at 19 n.4. Not only is it undisputed that the C & J principals          knew of the Peters claim prior to October 1993, but Peters adduced          direct evidence that the asset transfer was structured with the          specific intent to evade the Peters debt.                                         42          divesting corporation ceased business operations soon after asset          transfer, then liquidated or dissolved); Steel Co., 662 N.E.2d at          600 (noting significance of circumstantial evidence that acquiring          corporation "was incorporated on the same day that [predecessor]          ceased . . . ."). Peters adduced evidence that C & J not only          continued manufacturing the same jewelry products as Anson,   see          H.J.                 Baker, 554 A.2d at 205 (noting that two companies "sold          virtually identical [] products"), but conducted its manufacturing          at the same physical premises and continued servicing Anson's          principal customer, Tiffany's. Moreover, its uninterrupted          continuation of the Anson manufacturing business was prominently          announced to Anson's customers in an October 1993 letter from C &          J. See                  Glynwed, 869 F. Supp. at 277 (purchasing corporation "held          itself out to the world '"as the effective continuation of the          seller."'") (citations omitted);  Kleen                                                     Laundry                                                             &                                                                Dry                                                                     Cleaning          Servs.,                   Inc. v. Total                                 Waste                                       Mgt.,                                              Inc., 867 F. Supp. 1136, 1142          (D.N.H. 1994) ("This seamless client transfer reveals that the          defendant purchased and operated a complete business and, in so          doing, tacitly held itself out to the public as the continuation of          [] Portland Oil."); cf. United                                          States v. Mexico                                                           Feed                                                                &                                                                  Seed                                                                        Co.,          764 F. Supp. 565, 573 (E.D. Mo. 1991) (noting that the acquiring          corporation continued production of the same product lines and held          itself out to the public as a continuation of the divesting          corporation), aff'd in relevant part, 908 F.2d 478, 488 (8th Cir.          1992). In its October 1993 letter, C & J stated that it had          "acquired all of the assets of Anson," that it was its "intention                                         43          to build on [Anson's '55-year heritage of quality'] to reestablish          the Anson brand as the pre-eminent one [in the jewelry market],"          and that C & J had therefore " retained  all of the former  Anson          employees [including Anson's 'current retail sales representation']             the core of any business." (Emphasis added.)   See H.J. Baker,          554 A.2d at 205; see also Cyr v.  B.                                                Offen                                                      &                                                        Co.,                                                             Inc., 501 F.2d          1145, 1153-54 (1st Cir. 1974) (same employees continued to produce          same products in same factory); Mexico                                                  Feed, 764 F. Supp. at 572          (noting relevance of finding that acquiring entity retained "same          supervisory personnel" or "production facilities"). Finally, in          order to facilitate the product-line continuation, C & J specifi-          cally assumed responsibility for, and paid off, all indebtedness          due Anson's "essential" trade creditors.  See Asher, 659 So.2d at          600 (noting that "purchasing corporation [expressly] assumed those          liabilities and obligations of the seller [   e.g., trade debts]          ordinarily necessary for the continuation of the [seller's] normal          business operations"). Thus, the Peters proffer handily addressed          the third factor in the Baker inquiry.                         (iv) Commonality of Corporate Officers                     Fourth, Peters adduced sufficient evidence at trial that          C & J and Anson had "at least one common officer [viz., Considine          or Jacobsen] who [was] instrumental in the [asset] transfer."                                                                        H.J.          Baker, 554 A.2d at 205. C & J responds, inappositely, that the          respective ownership interests held by the principals in the          divesting and acquiring corporations were not identical, as          Considine owned 52% of the Anson stock, whereas Jacobsen and the                                         44          Considine Family Trust were equal shareholders in C & J.                     The present inquiry does not turn on a complete identity          of ownership ( i.e., shareholders), however, but on a partial          identity in the corporate managements (i.e., "officers"). Thus,          the fact that Jacobsen not only held a corporate office in both          Anson and C & J but was instrumental in negotiating the asset          transfer to C & J was sufficient in itself to preclude a Rule 50          dismissal under the fourth prong, even if he were not an Anson          shareholder.  See H.J.                                  Baker, 554 A.2d at 205 (noting that "the          management [of the two companies] remained substantially the          same").                    Further, the same result obtains even if we were to          assume that the "one common officer"     referred to in Baker              must be a shareholder as well. Prior to  Baker, the Rhode Island          Supreme Court did not require complete identity between those who          "controlled" the two corporations or the asset transfer, whether          their "control" derived from stock ownership or from their manage-          ment positions. For example, the court had upheld a judgment for          plaintiff, following trial, even though the officers and incorpora-          tors of the divesting and acquiring corporations were not the same,          on the ground that the                                 principals involved in the sale "all had a[]          [common] interest in the transaction."  Cranston Dressed Meat, 57          R.I. at 349;  cf. Casey, 623 A.2d at 19 (finding no successor          liability where two corporations shared                                                  no stockholders, officers,          or directors);                         cf.                             also                                  Glynwed, 869 F. Supp. at 277 ("[C]ontinuity          of ownership, not uniformity, is the test.");  Park v. Townson                                                                           &                                         45          Alexander, Inc.                        , 679 N.E.2d 107, 110 (Ill. App. Ct. 1997) ("We note          that the continuity of shareholders necessary to a finding of mere          continuation does not require complete identity between the          shareholders of the former and successor corporations.").          Considine easily fits the bill here. After all, "C & J" stands for          something and Jacobsen conceded at trial that Considine "partici-          pates in the management of C & J Jewelry." Moreover, Considine          admitted that no C & J decision could be taken without Considine's          prior approval.                     C & J heavily relies as well on the fact that Considine,          individually, held no direct ownership interest in C & J, but          instead had conveyed his interest to the Considine Family Trust.          Once again, however, as equity looks to substance not form,   see          Glynwed, 869 F. Supp. at 275, the fact that Considine established          a family trust to receive his ownership interest in C & J did not          warrant a Rule 50 dismissal, especially in light of his concession          that he actively participates in the management of C & J.     See          Fleet Credit Memo (10/14/93), at 1 ("[T]hese transactions will be          considered a Troubled Debt Restructure ('TDR') because of          Considine's effective control of the assets both before and after          the contemplated transaction."); id. at 14 (noting that Considine          would be a "Principal" of C & J, although his "involvement in day-          to-day operations will be limited"). Moreover, such intra-family          transfers may be nominal only, and thus may constitute circumstan-          tial evidence of a fraudulent, manipulative intent to mask the          continuity in corporate control.    See Park, 679 N.E.2d at 110                                         46          ("[W]hile the spousal relationship between the owners of the          corporations does not in itself establish a continuity of share-          holders, it is certainly a factor which can be considered."); The          Steel                 Co., 662 N.E.2d at 600 ("We cannot allow the law to be          circumvented by an individual exerting control through his          spouse.");                     Hoppa v.                              Schermerhorn & Co.                                               , 630 N.E.2d 1042, 1046 (Ill.          App. Ct. 1994) (noting that the fact that former joint tenant          shareholder's interest was reduced to 2%, and that an additional          family member was shareholder of successor corporation, did not          preclude finding of continuity); cf. Dickinson, 935 S.W.2d at 364          (recognizing "a conveyance to a spouse or near relative" as a badge          of fraud);                     supra note 7 ("The debtor retained possession or                                                                     control          of the property"). Focusing on the transactional substance, rather          than its form, therefore, we cannot conclude that a rational          factfinder could not decide that Considine used the family trust to          camouflage his ultimate retention of control over the Anson jewelry          manufacturing business which C & J continued to conduct, without          interruption, after Anson's demise.  See National                                                             Gypsum, 895 F.          Supp. at 337 ("The intended result in all cases is the same, to          permit the owners of the selling corporation to avoid paying          creditors without losing control of their business.") (emphasis          added).                         (v)  Insolvency of Divesting Corporation                     Finally, C & J does not dispute that Anson is a defunct          corporation, consequently unable to pay its debt to Peters.   See          Nelson v. Tiffany                             Indus., 778 F.2d 533, 535-36 (9th Cir. 1985)                                         47          ("Justification for imposing strict liability upon a successor to          a manufacturer . . . rests upon . . . the virtual destruction of          the plaintiff's remedies against the original manufacturer caused          by the successor's acquisition of the business."); The Ninth Ave.          Remedial Group                       , 195 B.R. at 727 ("The successor doctrine is derived          from equitable principles, and it would be grossly unfair, except          in the most exceptional circumstances, to impose successor          liability on an innocent purchaser when the predecessor is fully          capable of providing relief . . . .").                    Accordingly, since the Peters proffer, at the very least,          generated a trialworthy dispute under each of the five      Baker          factors, the Rule 50 motion was improvidently granted.          e.   Tortious Interference with Contract                    The tortious interference claim alleges that Fleet and          Considine acted in concert not only to extinguish the debt Anson          owed Peters for sales commissions, but caused Anson and C & J to          displace Peters prematurely as the sales representative for the          Tiffany's account. The parties agree that the tortious interfer-          ence claim required that Peters prove: (1) a sales-commission          contract existed between Anson and Peters; (2) Fleet and Considine                                              Anson retained but one asset     the keyman life insurance          policy                    under which Fleet, not Anson, was the named beneficiary.          See supra Section II.A.3(b).                 Peters did not name Fleet in the successor liability count          proper, nor seek to amend its complaint when the omission was          brought to its attention at trial. Consequently, we deem any          independent claim against Fleet abandoned. See                                                          Rodriguez v.                                                                       Doral          Mortgage Corp.                       , 57 F.3d 1168, 1172 (1st Cir. 1995) (abjuring trial          by ambush).                                         48          intentionally interfered with the sales-commission contract, and          (3) their tortious actions damaged Peters.                                                     See                                                         Jolicoeur Furniture          Co. v.                 Baldelli, 653 A.2d 740, 752 (R.I.),                                                    cert.                                                          denied, 116 S. Ct.          417 (1995);                      Smith Dev. Corp.                                      v.                                          Bilow Enters., Inc.                                                            , 308 A.2d 477,          482 (R.I. 1973). With respect to the first and third prongs, there          is no dispute that Fleet and Considine knew of the Peters contract          to serve as Anson's sales representative to Tiffany's, or that          Peters sustained damages due to the premature termination of its          sales-commission contract, without receiving payment for its          outstanding commissions.                    With respect to the disputed second criterion (   viz.,          intent), Peters need only establish that Fleet or Considine acted          with "legal malice                                an intent to do harm                                                     without                                                             justification."          Mesolella v. City of Providence, 508 A.2d 661, 669-70 (R.I. 1986)          (emphasis added); see Friendswood                                             Dev.                                                   Co. v. McDade                                                                 &                                                                   Co., 926          S.W.2d 280, 282 (Tex. 1996) (noting that defendant may assert          defense of "justification," by demonstrating that the alleged          interference was merely an exercise of its own superior or equal          legal rights, or a good-faith claim to a colorable albeit mistaken          legal right); see also  Shaw v. Santa                                                 Monica                                                         Bank, 920 F. Supp.          1080, 1087 (D. Haw. 1996);                                     Greenfield & Co. of N.J.                                                            v.                                                                SSG Enters.                                                                          ,          516 A.2d 250, 257 (N.J. Super. Ct. 1986). Proof of "[actual]          [m]alice, in the sense of spite or ill will, is not [only not]          required," Mesolella, 508 A.2d at 669-70, it is immaterial,   see          Texas                 Beef                      Cattle                             Co. v. Green, 921 S.W.2d 203, 211 (Tex. 1995)          ("[I]f the trial court finds as a matter of law that the defendant                                         49          had a legal right to interfere with a contract, then the defendant          has conclusively established the justification defense, and the          motivation behind assertion of that right is irrelevant.");   see          also               Belden                      Corp. v.                               InterNorth, Inc.                                              , 413 N.E.2d 98, 101 n.1 (Ill.          App. Ct. 1980); Kan-Sa                                  You v. Roe, 387 S.E.2d 188, 192 (N.C. Ct.          App. 1990).                     Since the successor liability claim was dismissed          improvidently,                         see                             supra Section II.B.2(d), the tortious interfer-          ence claim against Considine should have been submitted to the jury          as well. Since a party normally cannot "interfere" with his own          contract,                    see                        Baker v.                                 Welch, 735 S.W.2d 548, 549 (Tx. App. 1987),          Considine's status as Anson's CEO and controlling shareholder is          pertinent. As its contracting agent, Considine is Anson, and thus          had a qualified privilege to terminate the Peters contract.                     Nonetheless, specialized rules apply to tortious          interference claims against corporate agents. Agency liability is          precluded only if the agent either acted in the "best interests" of          its principal (viz., Anson), see Texas                                                  Oil                                                      Co. v. Tenneco,                                                                       Inc.,          917 S.W.2d 826, 831-32 (Tx. App. 1994), or, at the very least, did          not act solely to advance his own personal interests,                                                                see                                                                    Stafford          v. Puro, 63 F.3d 1436, 1442 (7th Cir. 1995) ("Directors and          officers are not justified in acting solely for their own benefit          or solely in order to injure the plaintiff because such conduct is          contrary to the best interests of the corporation.");  Powell v.          Feroleto Steel Co.                           , 659 F. Supp. 303, 307 (D. Conn. 1986);                                                                    Phillips          v. Montana                      Educ.                            Ass'n, 610 P.2d 154, 158 (Mont. 1980); see  also                                         50          Holloway v. Skinner, 898 S.W.2d 793, 796 (Tex. 1995) (noting that          the personal benefit exception is the logically necessary corollary          to the "rule that a party cannot tortiously interfere with its own          contract").                    Since Anson was insolvent, see infra Section II.B.2(f),          Considine's own investment in Anson was negligible at best, and the          trial record discloses that he not only acted intentionally to          evade Anson's obligation to Peters, but at the same time negotiated          for himself a $200,000 consulting fee. Thus, the circumstantial          evidence and the Considine memoranda to Fleet generated a          trialworthy issue as to whether Considine acted with "legal          malice."  See Mesolella, 508 A.2d at 669-70; see, e.g., Dallis v.          Don               Cunningham                          &                             Assocs., 11 F.3d 713, 717-18 (7th Cir. 1993)          (upholding jury verdict against corporate officer who had directed          corporation not to pay plaintiff his sales commissions, and where          the officer's "own compensation . . . skyrocketed" during the          relevant time period);  see  also, e.g.,  Chandler v.  Bombardier          Capital,                     Inc., 44 F.3d 80, 83 (2d Cir. 1994) (upholding jury          verdict against corporate officer who induced plaintiff's dismiss-          al, then personally took charge of plaintiff's department). This          is not a call the district court could make on a motion for          judgment as a matter of law.                    On the other hand, the tortious interference claim          against Fleet fails because Peters did not name Fleet as a          defendant in this count, nor move to amend when Fleet brought the          omission to Peters' attention. Cf. supra note 23. Even if Peters                                         51          had not abandoned its claim, moreover, it cites      no apposite          supporting case law.  See Carlton, 923 F.2d at 3 (plaintiff who          selects federal forum not entitled to trailblazing interpretations          of state law). Fleet unquestionably had a valid legal right to          foreclose on Anson's assets in March 1993, and the total Anson          indebtedness to Fleet exceeded the proven value of the Fleet          collateral. As this constituted an independent and legally suffi-          cient "justification" for the Fleet foreclosure, a finding of          "legal malice" appears to have been precluded as a matter of law.          See Friendswood                           Dev., 926 S.W.2d at 282 ("justification" is the          exercise of one's own legitimate legal rights); cf. Keene                                                                      Lumber          Co. v.  Levanthal, 165 F.2d 815, 820 (1st Cir. 1948) (finding          tortious interference where defendants made false representations          to unsecured creditor, and attempted to avoid the unsecured          creditor's claims by foreclosing upon sham chattel mortgages).                     f.   Breach of Fiduciary Duty                    Finally, Peters claims that Considine breached a          fiduciary duty to Peters, since the value of the shareholders'          investment in an insolvent company is negligible, and the          corporation's directors thereafter become trustees of "the          creditors to whom the [company's] property . . . must go."  Olney          v. Conanicut                        Land                             Co., 16 R.I. 597, 599 (1889) (emphasis added);          see Unsecured                         Creditors'                                    Comm. v. Noyes (In                                                       re                                                          STN                                                              Enters.), 779          F.2d 901, 904-05 (2d Cir. 1985); Association of Mill and Elevator          Mut. Ins. Co.                       v.                           Barzen Int'l, Inc.                                            , 553 N.W.2d 446, 451 (Minn. Ct.          App. 1996); Whitley v. Carolina Clinic, 455 S.E.2d 896, 900 (N.C.                                         52          Ct. App. 1995). Considine responds that Peters failed to establish          that he converted any of the Anson assets to his personal use, and          further that he could not have done so, because Fleet had a          comprehensive lien on all operating assets. We disagree.                     A breach of fiduciary duty need not amount to a conver-          sion in order to be actionable. "[D]irectors and officers [of          insolvent corporations] may not pursue personal endeavors inconsis-          tent with their duty of undivided loyalty to . . . the          corporations' stockholders and creditors." American Nat'l Bank of          Austin v.                    MortgageAmerica Corp.                                         (                                          In re MortgageAmerica Corp.                                                                     ), 714          F.2d 1266, 1276 (5th Cir. 1983); see National Credit Union Admin.          Bd. v.                 Regine, 749 F. Supp. 401, 413 (D.R.I. 1990) (as a fiduciary,          director must "place the interests of the corporation before his          own personal interests"). Whereas, the present record discloses,          for example, that Considine negotiated a $200,000 consulting fee          for himself as part of the October 1993 agreement,     see  supra          Section I, and Peters received nothing. Therefore, the jury must          determine whether Considine breached his duty as an Anson director:                    If, then, the director be a trustee, or one                    who holds a fiduciary relation to the credi-                    tors, in case of insolvency he cannot take                    advantage of his position for his own benefit                    to their loss. The right of the creditor does                    not depend on fraud or no fraud, but upon the                    fiduciary relationship.          Olney, 16 R.I. at 602.                    In addition, Peters maintained, without citing to Rhode          Island authority, that Fleet must be held answerable for inducing          Considine to breach his fiduciary duty to the bypassed Anson credi-                                         53          tors. Fleet correctly counters that it cannot be held liable,          however, since its comprehensive lien on the Anson operating assets          precludes a finding that Peters was a "creditor[] to whom the          [company's] property . . . must go."     Olney, 16 R.I. at 599.          Moreover, even assuming the Rhode Island courts were to recognize          such a cause of action, Peters would have had to show that: (1)          Considine breached a fiduciary duty; (2) Fleet knowingly induced or          participated in the breach; and (3) Peters sustained damages from          the breach.  Whitney v. Citibank,                                              N.A., 782 F.2d 1106, 1115 (2d          Cir. 1986). We are unable to discern how Peters could succeed on          a tortious inducement-to-breach claim which is essentially "analo-          gous to a cause of action for intentional interference with          contractual relations."  Id. Thus, for the reasons discussed in          relation to the tortious interference claim against Fleet,    see          supra Section II.B.2(e), we affirm the dismissal of the present          claim as well.                                         III                                     CONCLUSION                    Accordingly, the district court judgment is affirmed          insofar as it dismissed all claims against Fleet; the judgments in          favor of C & J and Considine are affirmed, except for the successor          liability claim against C & J and the claims for tortious interfer-          ence with contract and breach of fiduciary duty against Considine,          which claims are remanded to the district court for further                                         54          proceedings consistent with this opinion.                    SO ORDERED.                                               We note also that though we have adverted to various          numerical figures, drawn from the trial record, to demonstrate in          broad outline that Peters did generate trialworthy factual disputes          appropriately left to the trier of fact, we do not suggest that the          court, on remand, is in any way bound by these figures, as          distinguished from the legal principles espoused in our opinion.                                         55
