By order of the Bankruptcy Appellate Panel, the precedential effect of this decision is limited to
the case and parties pursuant to 6th Cir. BAP LBR 8013-1(b). See also 6th Cir. BAP LBR 8010-
1(c).

                                     File Name: 09b0001n.06

            BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: ELIZABETH ANN DIRKS,                           )
                                                      )
            Debtor.                                   )
______________________________________                )
                                                      )
RUTH A. SLONE, Trustee,                               )
                                                      )
               Plaintiff - Appellant,                 )           No. 08-8031
                                                      )
               v.                                     )
                                                      )
TIMOTHY DIRKS,                                        )
                                                      )
            Defendant - Appellee.                     )
______________________________________                )



                           Appeal from the United States Bankruptcy Court
                    for the Southern District of Ohio, Western Division at Dayton.
                          Bankruptcy Case No. 06-30529; Adv. No. 06-3295.

                                    Argued: November 18, 2008

                                Decided and Filed: January 16, 2009

   Before: McIVOR, PARSONS, and SHEA-STONUM, Bankruptcy Appellate Panel Judges.

                                        ____________________

                                             COUNSEL

ARGUED: Stephen D. Brandt, Dayton, Ohio, for Appellant. Jeffrey R. McQuiston, LAW
OFFICE, Dayton, Ohio, for Appellee. ON BRIEF: Stephen D. Brandt, Dayton, Ohio, for
Appellant. Jeffrey R. McQuiston, LAW OFFICE, Dayton, Ohio, for Appellee.


                                                  1
                                     ____________________

                                           OPINION
                                     ____________________

       MARCI B. McIVOR, Bankruptcy Appellate Panel Judge. The chapter 7 trustee appeals the
bankruptcy court’s order granting judgment in favor of the defendant on the trustee’s preferential and
fraudulent conveyance claims. For the following reasons, we AFFIRM the decision of the
bankruptcy court.

                                       ISSUES ON APPEAL

       The issues presented in this appeal are:
       (1) whether the bankruptcy court violated the Rooker-Feldman doctrine, the Full Faith and
Credit Act, 28 U.S.C. § 1738, and the parol evidence rule by concluding that it was not bound by a
marital debt provision in a state court judgment of divorce, and by considering evidence inconsistent
with the state court orders;
       (2) whether the bankruptcy court erred in dismissing the chapter 7 trustee’s fraudulent
transfer claim brought under § 548 of the Bankruptcy Code and the Ohio Uniform Fraudulent
Transfer Act, Ohio Revised Code § 1336.01, et seq., based on the court’s finding that the debtor
received reasonably equivalent value in exchange for her transfer of her interest in the marital
residence to her former husband; and
       (3) whether the bankruptcy court erred in concluding that the Debtor’s transfer of her interest
in the marital residence was not “on account of an antecedent debt” and, consequently, not a
preference under § 547 of the Bankruptcy Code.


                       JURISDICTION AND STANDARD OF REVIEW

       The Sixth Circuit Bankruptcy Appellate Panel has jurisdiction to decide this appeal. The
United States District Court for the Southern District of Ohio has authorized appeals to the Panel,
and neither party timely elected to have this appeal heard by the district court. A final order of a
bankruptcy court may be appealed by right under 28 U.S.C. § 158(a)(1). An order is final if it “ends

                                                  2
the litigation on the merits and leaves nothing for the court to do but execute the judgment.”
Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 1494, 1497 (1989) (citations
and internal quotation marks omitted). The bankruptcy court’s judgment resolved the underlying
adversary proceeding on its merits and is a final, appealable order. Lyon v. Eiseman (In re Forbes),
372 B.R. 321, 325 (B.A.P. 6th Cir. 2007).

        The bankruptcy court’s conclusions of law are reviewed de novo. Riverview Trenton R.R.
Co. v. DSC, Ltd. (In re DSC, Ltd.), 486 F.3d 940, 944 (6th Cir. 2007). “Under a de novo standard
of review, the reviewing court decides an issue independently of, and without deference to, the trial
court’s determination.” Menninger v. Accredited Home Lenders (In re Morgeson), 371 B.R. 798,
800 (B.A.P. 6th Cir. 2007). The court’s findings of fact are reviewed under the clearly erroneous
standard. In re DSC, Ltd., 486 F.3d at 944. “A finding of fact is clearly erroneous ‘when although
there is evidence to support it, the reviewing court on the entire evidence is left with the definite and
firm conviction that a mistake has been committed.’” Id. (quoting Anderson v. City of Bessemer
City, 470 U.S. 564, 573, 105 S. Ct. 1504, 1511 (1985)).

                                                FACTS

        On August 15, 2003, Elizabeth Ann Dirks (“Debtor”) and her then husband, Timothy Dirks
(“Defendant”), purchased real property located in Miamisburg, Ohio for their marital residence,
taking title in both their names. On May 21, 2004, the Defendant filed for divorce from the Debtor
in the Domestic Relations Division of the Common Pleas Court of Montgomery County, Ohio
(“Domestic Relations Court”). The parties’ only significant marital asset was their residence, which
was stipulated to have a value of $183,000, secured by a joint mortgage debt in the amount of
$134,896.23 owed to Washington Mutual Bank. The parties’ remaining marital debt totaling
$15,096.29 was unsecured, with $11,473.78 owed by the Defendant and the remaining $3,622.51
owed by the Debtor.

        On October 18, 2005, the Domestic Relations Court filed a Decision, noting the parties’
agreement that the Defendant would have 30 days to buy out the Debtor’s interest in the marital
residence and remove her name from the mortgage. The Decision further provided that if the


                                                   3
Defendant was unable to refinance the mortgage or the parties were unable to reach an agreement,
then the property would be listed with a specified real estate agent and the net proceeds divided upon
sale. Additionally, the Decision stated the agreement of the parties that “[e]ach party shall be
responsible for debts in his or her own name unless otherwise agreed.” (Appellant’s Ape. at 86.)

       On October 21, 2005, the Domestic Relations Court entered an agreed order providing:
“[Defendant] is specifically authorized to refinance the mortgage on [the marital residence] and to
pay [Debtor] the sum of $11,500, as agreed between the parties, for her interest in said real estate,
and [Debtor] shall execute and deliver a Quit-Claim Deed as to said real estate concurrent with said
refinancing.” (Appellant’s Ape. at 89.) As contemplated by the terms of the order, the Defendant
subsequently refinanced the mortgage on the Miamisburg property and on October 25, 2005, gave
the Debtor a check in the amount of $11,500, with the Debtor in return delivering a quit claim deed
to the Defendant transferring her interest in the marital residence. The Defendant recorded the deed
on November 7, 2005. The Defendant’s refinanced loan was in the amount of $167,000, from which
was disbursed $134,896.23 to Washington Mutual, $11,500 to the Debtor, $9,150 to Chase Bank,1
and $6,793 to Capital One Bank.2 After settlement charges were deducted, Defendant received
$1,325.58 from the refinanced loan.

       On November 22, 2005, the Domestic Relations Court entered a final judgment of divorce,
which included the following provision:
               The parties represent there are no joint debts. Each party shall be responsible
       for and timely pay any debts in his or her own name. Neither party shall incur any
       debt in the name of the other.
(Appellant’s Ape. at 81.)




       1
         The $9,150 disbursed to Chase Bank paid the balance owed on the Defendant’s automobile
loan in full. At trial, the Defendant testified that he had to pay his vehicle loan in full in order to
qualify for the refinanced loan.
       2
         The $6,793 payment to Capital One paid in full the Defendant’s portion of the unsecured
marital debt, which had been consolidated on the Capital One credit card.

                                                  4
        Debtor filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code on March
16, 2006. After being appointed chapter 7 trustee, Ruth A. Slone (“Trustee”) filed an adversary
complaint against the Defendant to avoid and recover the transfer of the Debtor’s interest in the
Miamisburg property pursuant to §§ 544, 547, 548 and 550 of the Bankruptcy Code and the Ohio
Uniform Fraudulent Transfer Act. A trial was held on March 27, 2008, at the conclusion of which
the bankruptcy court read its opinion into the record. As to the Trustee’s preference claim, the court
concluded that Debtor’s transfer of her interest in the marital residence was an equitable property
division, rather than a transfer on account of an antecedent debt as required for a preferential transfer
under 11 U.S.C. § 547(b)(2). To the extent, as argued by the Trustee, that the transfer could be
deemed to be on account of an antecedent debt created by the agreement between the Debtor and the
Defendant that she would sell her interest for $11,500, the court concluded that the transfer was
made in exchange for contemporaneous new value pursuant to 11 U.S.C. § 547(c)(1) and, therefore,
excepted from avoidance.

        Regarding the Trustee’s fraudulent transfer claim, the court observed that in determining
whether reasonably equivalent value was given for the transfer, it was “not bound by the Domestic
Relations Court’s determination as to who is responsible for what debt.” (Appellant’s Ape. at. 68-
69.) Rather, the court noted that it “must simply compare the value of the property transferred with
that of the property received.” (Appellant’s Ape. at 69.) In order to arrive at the value of the
property transferred by the Debtor, the court concluded that it was proper to reduce the payoff
amount by one-half of the marital debt since these liabilities were incurred by the parties during their
marriage. The court also deducted the cost of a hypothetical real estate commission, i.e., 7% of the
stipulated value of the property. Under the court’s calculations, starting with a value of $183,000,
deducting the mortgage of $134,896, a real estate commission of $12,810, and the marital debt of
$15,096, left a balance of $20,198, with the Debtor’s one-half interest being $10,099. Based on this
calculation and observing that the terms of the divorce were negotiated at arm’s length with the
assistance of competent attorneys, the bankruptcy court concluded that the $11,500 received by the
Debtor for the transfer of her interest in the property was reasonably equivalent to the value of the
interest transferred.



                                                   5
       An order was entered in favor of the Defendant on all claims on April 1, 2008. It is from this
order that the Trustee appeals.

                                          DISCUSSION

       On appeal, the Trustee argues that by ignoring the orders entered by the Domestic Relations
Court, and by considering evidence inconsistent with those orders, the bankruptcy court violated the
Rooker-Feldman doctrine,3 the Full Faith and Credit Act, and the parol evidence rule. The Trustee
also contends that the bankruptcy court erred in concluding that the Debtor’s transfer was not a
preference or a fraudulent conveyance under the Bankruptcy Code, and was not a fraudulent transfer
under the Ohio Uniform Fraudulent Transfer Act.

                                  The Rooker-Feldman Doctrine

       The Rooker-Feldman doctrine is a jurisdictional mandate that provides that lower federal
courts lack subject matter jurisdiction to review appeals from state court judgments. The doctrine
is derived from two Supreme Court cases, Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S. Ct. 149
(1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S. Ct. 1303
(1983), in which the losing parties in state court actions turned to federal court for relief from the
state court judgments, in effect seeking to “appeal” their state cases to a federal district court.
Hamilton v. Herr (In re Hamilton), 540 F.3d 367, 371 (6th Cir. 2008). The doctrine is a narrow one,
confined to cases out of which the name arises. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544
U.S. 280, 284, 125 S. Ct. 1517 (2005). The Rooker-Feldman doctrine does not bar federal courts
from deciding an independent claim, even if doing so requires the federal court to deny a legal
conclusion of the state court. Sill v. Sweeney (In re Sweeney), 276 B.R. 186, 195 (B.A.P. 6th Cir.
2002; see also In re Hamilton, 540 F.3d at 372 (“[T]he Rooker-Feldman doctrine provides no
protection in areas where Congress has explicitly endowed federal courts with jurisdiction.”).




       3
         The Trustee argued in her trial brief filed in the bankruptcy court that the Rooker-Feldman
doctrine had no applicability to the present case.

                                                  6
       The Rooker-Feldman doctrine has no application in the present appeal. Neither the Debtor
nor the Defendant who were the parties to the divorce action sought federal court review of any
judgment or order issued by the Domestic Relations Court. The Trustee was not a party to the state
court action, and even if she had been, by her own admission she did not seek modification in the
bankruptcy court of any Domestic Relations Court judgment or order. The bankruptcy court did not
sit as a court of appeals for the state court, but instead ruled on an independent legal issue not
addressed in the state court proceedings. The Rooker-Feldman doctrine did not deprive the
bankruptcy court of jurisdiction to analyze independently the matters brought before it by the
Trustee.

                                      Full Faith and Credit

       The Full Faith and Credit statute requires federal courts to give state court judgments the
same preclusive effect they would be given by the rendering state. Marrese v. Am. Acad. of
Orthopaedic Surgeons, 470 U.S. 373, 380, 105 S. Ct. 1327, 1332 (1985). In the instant appeal, the
preclusive effect in federal court of the state court judgment of divorce is determined by Ohio law.

       Ohio law recognizes both issue and claim preclusion. Claim preclusion requires proof of the
following elements:
       (1) a prior final, valid decision on the merits by a court of competent jurisdiction;
       (2) a second action involving the same parties, or their privies, as the first; (3) a
       second action raising claims that were or could have been litigated in the first action;
       and (4) a second action arising out of the transaction or occurrence that was the
       subject matter of the previous action.
Corzin v. Fordu (In re Fordu), 201 F.3d 693, 703-04 (6th Cir. 1999). Issue preclusion, on the other
hand, applies when a fact or issue:
       (1) was actually and directly litigated in the prior action, (2) was passed upon and
       determined by a court of competent jurisdiction, and (3) when the party against
       whom issue preclusion is asserted was a party in privity with a party to the prior
       action.
Id. at 704 (quoting Thompson v. Wing, 637 N.E.2d 917, 923 (Ohio 1994)).




                                                  7
        Under Ohio law, claim preclusion requires an identity of parties, i.e., the parties to the
subsequent action must be identical to or in privity with the parties to the original suit. Alternatives
Unlimited-Special, Inc. v. Ohio Dept. of Ed., 861 N.E.2d 163, 175 (Ohio 2006). In this case, the
Trustee was neither a party to the state court divorce proceedings nor was she in privity with the
Debtor in the state court proceedings. In re Fordu, 201 F.3d at 704-06 (the trustee in bankruptcy
represents the interests of creditors and was not in privity with the debtor in debtor’s state court
marital dissolution proceeding). Thus, the principles of claim preclusion do not apply.

        With respect to issue preclusion, Ohio law requires that a fact or issue must have been
actually and necessarily litigated in the prior action. In the present appeal, the parties agreed to the
property settlement provisions in the divorce decree and did not litigate those provisions. Even if
they had litigated those provisions, the standard used by bankruptcy courts to determine whether a
transfer was supported by reasonably equivalent value is not the standard used by Ohio domestic
relations courts in making property divisions. Id. at 707-08. Issue preclusion bars the relitigation
of an issue which was actually and necessarily litigated in an earlier action. The issue addressed by
the Domestic Relations Court was not the same as the issue determined by the bankruptcy court.
Accordingly, neither issue nor claim preclusion apply in the present case; therefore, the bankruptcy
court was not obligated to afford full faith and credit to the state court judgment of divorce.

                                     The Parol Evidence Rule

        The Trustee asserts that the bankruptcy court violated the parol evidence rule by considering
extrinsic evidence that contradicted the express terms of the judgment of divorce. The parol evidence
rule is one of substantive law designed to protect the integrity of final, written agreements. Glazer
v. Lehman Bros., Inc., 394 F.3d 444, 455 (6th Cir. 2005). The Sixth Circuit summarized the rule as
follows:
        The parol evidence rule, as is now universally recognized, is not a rule of evidence
        but is one of substantive law. It does not exclude evidence for any of the reasons
        ordinarily requiring exclusion, based on the probative value of such evidence or the
        policy of its admission. The rule as applied to contracts is simply that as a matter of
        substantive law, a certain act, the act of embodying the complete terms of an
        agreement in a writing (the “integration”), becomes the contract of the parties. The
        point then is, not how the agreement is to be proved, because as a matter of law the

                                                   8
       writing is the agreement. Extrinsic evidence is excluded because it cannot serve to
       prove what the agreement was, this being determined as a matter of law to be the
       writing itself. The rule comes into operation when there is a single and final
       memorial of the understanding of the parties. When that takes place, prior and
       contemporaneous negotiations, oral or written, are excluded; or, as it is sometimes
       said, the written memorial supersedes these prior or contemporaneous negotiations.
Id. at 455-56 (quoting Galmish v. Cicchini, 734 N.E.2d 782, 788-89 (Ohio 2000)).

       Ohio law controls the parol evidence question in the instant appeal. Under Ohio’s parol
evidence rule:
       The intent of the parties to a contract is presumed to reside in the language they chose
       to employ in the agreement. A court will resort to extrinsic evidence in its effort to
       give effect to the parties’ intentions only where the language is unclear or ambiguous,
       or where the circumstances surrounding the agreement invest the language of the
       contract with a special meaning.
Kelly v. Med. Life Ins. Co., 509 N.E.2d 411, 413 (Ohio 1987) (internal citation omitted).

       The parol evidence rule has no applicability in the present case. The parol evidence rule
would apply if the Trustee’s claims required the bankruptcy court to interpret the judgment of
divorce or rule on whether the judgment of divorce complied with state law. However, the Trustee’s
claims required the bankruptcy court to determine whether the Debtor’s transfer of her interest in
property to the Defendant for $11,500 was either a preference or a fraudulent transfer under the
Bankruptcy Code. The bankruptcy court could admit any testimony that was probative on these
issues. The bankruptcy court did not err in considering evidence that supplemented the terms of the
state court judgment of divorce.

                             Preferential Transfer - 11 U.S.C. § 547(b)

       The Trustee also argues that the bankruptcy court committed reversible error in holding that
the Debtor’s transfer of her interest in the marital residence was not a preferential transfer under
§ 547(b) of the Bankruptcy Code which provides:
       (b) Except as provided in subsections (c) and (i) of this section, the trustee may avoid
       any transfer of an interest of the debtor in property–
                 (1) to or for the benefit of a creditor;


                                                     9
               (2) for or on account of an antecedent debt owed by the debtor before such
               transfer was made;
               (3) made while the debtor was insolvent;
               (4) made–
                       (A) on or within 90 days before the date of the filing of the petition;
                       or
                       (B) between ninety days and one year before the date of the filing of
                       the petition, if such creditor at the time of such transfer was an
                       insider; and
               (5) that enables such creditor to receive more than such creditor
               would receive if–
                       (A) the case were a case under chapter 7 of this title;
                       (B) the transfer had not been made; and
                       (C) such creditor received payment of such debt to the extent
                       provided by the provisions of this title.
The Trustee must establish all five statutory elements of a preference by a preponderance of the
evidence before the transfer may be avoided. 11 U.S.C. § 547(g); ABB Vecto Gray, Inc. v. First
Nat’l Bank (In re Robinson Bros. Drilling, Inc.), 9 F.3d 871, 874 (10th Cir. 1993).

       The bankruptcy court held that the Debtor’s transfer, which the court concluded was “an
equitable division of property under the divorce decree,” did not meet the requirement of § 547(b)(2)
that the transfer be “for or on account of an antecedent debt owed by the debtor before such transfer
was made.” The Trustee argues that the bankruptcy court erred in this conclusion. According to the
Trustee, upon the filing of the divorce complaint, the Defendant had a contingent claim against the
Debtor for a portion of the parties’ marital debt. The Trustee states that this contingent claim
became “liquidated” when the parties reached an agreement as to the terms of the Debtor’s sale of
her interest. Alternatively, the Trustee asserts that agreement by the parties was the antecedent debt.

       The Bankruptcy Code does not define the phrase “antecedent debt,” but the term “debt” is
defined to mean liability on a claim. 11 U.S.C. § 101(12). “Claim” is defined in § 101(5) of the
Code to mean the right to payment or the right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment. A debt is “antecedent” if it was incurred before the


                                                  10
transfer took place. Whittaker v. BancOhio Nat’l Bank (In re Lamons), 121 B.R. 748, 750 (Bankr.
S.D. Ohio 1990).

        The Panel does not need to address the issue of whether the mere filing of a divorce
complaint creates a contingent obligation between the divorcing parties. There is no indication in
the record that the Debtor quit claimed her interest in the marital property to satisfy an antecedent
debt or to settle any claim that the Defendant had against her.4 Rather, all the orders of the Domestic
Relations Court indicated that the Debtor was simply selling her interest in the marital residence to
the Defendant, in lieu of their jointly selling the property and splitting the proceeds. The Trustee
admits as much in her Appellant’s brief, wherein she observes that the October 21, 2005 order
“facilitated the completion of the parties’ agreement whereby defendant purchased Debtor’s interest
in the marital residence.” The Domestic Relations Court orders clearly gave the Debtor the option
of selling the property and splitting the proceeds if the parties were unable to agree on a price. Thus,
the logical inference from the fact that the Debtor and the Defendant agreed upon a price whereby
the Debtor would sell her interest to the Defendant is that she believed she was receiving as much
or more than she would receive in a sale to a third party. Rather than a transfer on account of an
antecedent debt, the transfer was a sale of a property interest in exchange for the payment of $11,500,
the sum that the parties agreed upon as the value of her interest. Accordingly, we find no error in
the bankruptcy court’s conclusion that the transfer at issue was not on account of an antecedent debt
and that, therefore, the Trustee failed to establish all of the elements of a preference under § 547(b).
Because no preference was established, the bankruptcy court’s findings on the contemporaneous
exchange for new value defense under § 547(c)(1) need not be reviewed.




        4
          The record does contain a letter dated March 4, 2005, from the Defendant’s attorney to the
Debtor’s attorney, setting forth an offer for the Defendant to pay the Debtor the sum of $10,180.02
for her interest in the marital residence. The letter indicates that the offered price had been reduced
by the sum of $1,454.48, the total of two checks allegedly forged by the Debtor. There is no
subsequent letter in the record accepting or rejecting this offer or evidencing any type of settlement
between the parties. The attorney for the Debtor testified that he could not recall how the $11,500
sum was arrived at, and denied that the amount was a “sweetheart deal” that gave the Defendant a
disproportionate share of the assets.

                                                  11
Fraudulent Transfer - 11 U.S.C. § 548(a)(1)(B) and Ohio Rev. Code § 1336.04(A)(2)(a) and (b)

        The Trustee’s final argument on appeal is that the Debtor received less than reasonably
equivalent value in exchange for the transfer of her interest in the marital property in violation of the
Bankruptcy Code and the Ohio Uniform Fraudulent Transfer Act.
        Section 548(a)(1)(B) of the Bankruptcy Code provides in pertinent part:
        (a)(1) The trustee may avoid any transfer (including any transfer to or for the benefit
        of an insider under an employment contract) of an interest of the debtor in property,
        or any obligation (including any obligation to or for the benefit of an insider under
        an employment contract) incurred by the debtor, that was made or incurred on or
        within 2 years before the date of the filing of the petition, if the debtor voluntarily or
        involuntarily–
                ....
                (B)(i) received less than a reasonably equivalent value in exchange for such
                transfer or obligation; and
                (ii)(I) was insolvent on the date that such transfer was made or such
                obligation was incurred, or became insolvent as a result of such transfer or
                obligation[.]

        Similarly, under the Ohio Uniform Fraudulent Transfer Act, the party attempting recovery
under a constructive fraud theory must prove that the debtor transferred an interest in property for
less than reasonably equivalent value in exchange for the transfer, and either (1) the debtor was
engaged or was about to engage in a business or transaction for which the remaining assets of the
debtor were unreasonably small in relation to the business or transaction; or (2) the debtor intended
to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability
to pay as they became due. Ohio Rev. Code § 1336.04(A)(2)(a) and (b).

        To determine reasonably equivalent value, the court first considers whether a debtor received
any value for the exchange. In re Wilkinson, 196 Fed. Appx. 337, 341 (6th Cir. 2006). If value was
received, the court then determines whether the value received was reasonably equivalent to the
value surrendered. Id; see also In re Fordu, 201 F.3d at 707-08 (the test used to determine whether
a transfer was supported by reasonably equivalent value focuses on whether there is reasonable
equivalence between the value of property surrendered and that which was received in exchange).
Attention is paid to the value received by the debtor on the date of the transfer, not on the value

                                                   12
given by the transferee. In re Wilkinson, 196 Fed. Appx. at 341-42. The calculation of reasonably
equivalent value is fact specific and, thus, the bankruptcy court’s findings may be reversed on appeal
only if clearly erroneous. Id. at 341. The methodology used in assessing value is an issue of law
reviewed de novo. Id. at 342.

       “Reasonably equivalent value” is not defined in the Bankruptcy Code, although “value” is
defined as “property, or satisfaction or securing of a present or antecedent debt of the debtor.”
11 U.S.C. § 548(d)(2)(A). “[T]he debtor need not collect ‘a dollar-for-dollar equivalent to receive
reasonably equivalent value.’” Barber v. Golden Seed Co., Inc., 129 F.3d 382, 387 (7th Cir. 1997)
(quoting Matter of Fairchild Aircraft Corp., 6 F.3d 1119, 1125-26 (5th Cir. 1993)). Both direct and
indirect benefits are considered when evaluating reasonable equivalence. Meeks v. Don Howard
Charitable Remainder Trust (In re S. Health Care of Ark., Inc.), 309 B.R. 314, 319 (B.A.P. 8th Cir.
2004). Before indirect benefits may be considered, however, the value of the benefit must be
tangible. Id.; see also Dayton Title Agency, Inc. v. White Family Cos. (In re Dayton Title Agency,
Inc.), 292 B.R. 857, 874-75 (Bankr. S.D. Ohio 2003) (applying same principles under Ohio
Fraudulent Transfer Act).

       The Trustee contends that the bankruptcy court erred by dividing the marital debt in half and
by subtracting a fictional real estate commission. The bankruptcy court reasoned in this regard that:
               The Court believes that it was proper to reduce the payoff amount due to the
       Debtor by one half of the marital debt since these liabilities were incurred by the
       parties during their marriage. By paying more than half of the marital debt Defendant
       conferred a benefit onto Debtor which benefit was adjusted by the equal division of
       the debt in the computation of the payoff amount.

               The Court also believes under the circumstances of this case, the deduction
       of a hypothetical real estate commission or sale cost is appropriate. The evidence
       reflects that the Debtor had the option of accepting the $11,500.00 offered by
       Defendant or subject the residence to sale with a split of the net proceeds. Debtor
       chose to accept the $11,500.00 rather than subject the residence to sale. This, in this
       Court’s mind, was an acknowledgment that the Debtor recognized that her take home
       from any sale would have necessarily been lower if the residence was sold to recover
       the Defendant’s and Debtor’s interests in the Property due to incurring a real estate
       commission and other sale costs in selling the residence. Further, the Defendant and
       Debtor even agreed as to what real estate agent would be used to sell the residence.


                                                 13
        If the Trustee succeeded to the Debtor’s interest in the residence, the only way the
        Trustee could recover the Debtor’s interest in the property would have been to sell
        the property and incur sale costs, including a real estate commission. Thus, under the
        circumstances of this case, the Court finds the deduction of a hypothetical real estate
        commission or sale cost is appropriate in determining whether the Defendant
        conveyed reasonably equivalent value to the Debtor.
(Appellant’s Ape. at 69-70.)

        This Panel finds no error in the manner in which the bankruptcy court determined reasonably
equivalent value. With respect to the bankruptcy court’s deduction of one-half of the marital debt
in determining the value of the Debtor’s interest in the parties’ residence, the marital debt was a joint
obligation of both the Debtor and the Defendant even though the majority of the debts were incurred
in the Defendant’s name. See Lemaster v. Lemaster, 2005-Ohio-2513, 2005 WL 1207571, at *2
(Ohio App. May 20, 2005); Myers v. Myers, No. L-99-1168, 2000 WL 331573, at *3 (Ohio App.
Mar. 31, 2000) (whether created by one or both spouses during marriage, marital debt is joint
obligation of both). While undeniably the bankruptcy court’s deduction was contrary to the
Domestic Relations Court’s orders that each party would be responsible solely for the debts in their
name, as previously discussed, in Fordu the Sixth Circuit held that the bankruptcy court was not
bound by the manner in which the domestic relations court allocated property in determining
reasonably equivalent value under § 548(a)(1)(B).

        Similarly, the bankruptcy court’s deduction of a hypothetical real estate agent’s commission
was not erroneous. In determining reasonably equivalent value under § 548(a), the “proper focus
is on the net effect of the transfers on the debtor’s estate, the funds available to the unsecured
creditors.” See In re Fordu, 201 F.3d at 707 (quoting Harman v. First Am. Bank (In re Jeffrey
Bigelow Design Group, Inc.), 956 F.2d 479, 484 (4th Cir. 1992)). If the transfer were to be set aside
and the Debtor’s interest in the realty brought back into her bankruptcy estate, that interest would
have to be liquidated, with the additional expense of a realtor or an auctioneer reducing the net value
to the estate. Accordingly, we find no error in this regard.

        Considering all the facts and circumstances in this case, we conclude that the bankruptcy
court’s determination that the Debtor received reasonably equivalent value in exchange for her


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transfer of her interest in the marital residence was not clearly erroneous. As noted by the court, the
value given by Defendant was based on an arm’s length negotiation, between parties who were
represented by “very able and well respected, competent legal counsel.” (Appellant’s Ape. at 71.)
See Raleigh v. Haskell (In re Haskell), No. 96 B 14602, 1998 WL 809520, at *8 (Bankr. N.D. Ill.
Nov. 19. 1998) (arms length transaction is important element in determination of reasonable
equivalence). In agreeing to the sale to the Defendant, the Debtor was able to quickly liquidate for
cash her interest in the realty, without waiting on the vagaries of the real estate market. Also, the
Debtor was released from any liability under the mortgage. When these indirect benefits are added
to the actual cash payment received by the Debtor, and in light of the clearly erroneous standard of
review, we are compelled to affirm the bankruptcy court on this issue.

                                          CONCLUSION

       Based on the foregoing, the Panel AFFIRMS the bankruptcy court’s order granting judgment
in favor of the Defendant on the Trustee’s preferential and fraudulent conveyance claims.




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