Summary:
The Trustee sought to avoid payments made to Craft Air Services of $60,000 for services that were provided to the Debtor Tanglewood Farms. The dispute turned on whether the obligation to Craft Air was solely the liability of James Winslow, the 100% owner of Tanglewood Farms, or also of Tanglewood Farms itself. The bankruptcy court reviewed the requirements for a reasonably equivalent value defense, holding that “[a]lthough reasonably equivalent value may be the satisfaction of the antecedent debt or obligation of the debtor, it is not the satisfaction or guarantee of the debt of another.” Id. at 710 (citing Tourtellot v. Huntington Nat'l Bank, (In re Renegade Holdings, Inc.), 457 B.R. 441, 444 (Bankr.M.D.N.C.2011). Craft Air had sent 29 statements to addressed to Winslow and Tanglewood Farms, which constituted an account stated under North Carolina law, which requires:
(1) a calculation of the balance due;
(2) submission of a statement to [the party to be charged];
(3) acknowledgment of the correctness of that statement by [the party to be charged]; and
(4) a promise, express or implied, by [the party charged] to pay the balance due.
The lack of objection for a reasonable time, as shown by the 29 statements, by both Tanglewood Farms and Winslow constituted a agreement that the account was correct. As Tanglewood Farms was jointly liable to Craft Air, the satisfaction of this debt was not preferential.
Commentary:
With its reliance on the account stated means of proving liability for a debt, this case could be used similarly for providing the requirements that an Proof of Claim, lacking a signed contract, needs to include as supporting documents and evidence.
For a copy of the opinion, please see:
Tanglewood Farms- Reasonably Equivalent Value in Satisfaction of Joint Debt; Account Stated
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