Spagnoli told them he was transferring the properties to them in order to avoid his creditors.
15. Accordingly, it is concluded that these transfers were designed to "hinder, delay or defraud" the RTC.
16. The transfers having been made to hinder, delay or defraud the RTC, 12 U.S.C. § 1821 (d) (17) permits the RTC to avoid such transfers and to recover the property transferred or the value of such property from any transferee, except "any transferee that takes for value, . . ., in good faith." 12 U.S.C. § 1821 (D)(17(c)(i).
Accordingly, in order to defeat the RTC's ability to avoid these transfers, defendants must demonstrate both that they gave "value" and that the transfers were in good faith.
17. In the context of a fraudulent conveyance action, it is the transferee's burden to prove that value was given for the transfer. See Johnson v. Lentini, 66 N.J. Super. 398, 405, 169 A.2d 208 (Ch. Div. 1961). The defendants attempted to meet this burden by attempting to demonstrate that the transfers were repayments of "loans" made over the years. The "loans" made by Annette Spagnoli, Paul Longo and Charles Ballister were for the most part decades old and covered such items as insurance payments, college tuition and other items of support usually given by close relatives to young family members. There are no documents evidencing these "loans" and the family members cannot specify the amount of these "loans." Even if true loans they be, they are not the type of legally enforceable obligations that qualify as an antecedent debt for fraudulent conveyance purposes. See In re Fleet, 89 Bankr. 420, 426 (E.D. Pa. 1988).
18. Spagnoli also allegedly "repaid" his brother Nick $ 35,000 in August 1990. Nick testified that he gave Beverly Hills Realty, the Spagnolis' real estate business, $ 30,000 one month earlier and that this transfer was in repayment of that "loan" plus others. However, Nick Spagnoli could not explain why a loan to the business was repaid from a personal checking account or why Beverly Hills Realty needed a loan when William and Beverly Spagnoli had ample cash at that time (one week later Spagnoli transferred $ 185,30 in cash to other family members). Nor could Nick Spagnoli prove the existence of the other loans make up the $ 35,000 transferred to him.
19. Likewise, the repayment of $ 30,000 to Barry Spagnoli was not for value because Barry owed Spagnoli $ 384,000 -- Spagnoli owed Barry nothing.
20. Accordingly, it is concluded that these transfers were not given for value as they did not repay legally enforceable antecedent debts.
21. The defendants must also demonstrate their "good faith" in receiving these assets. The family members all knew Spagnoli had been terminated from his employment when they received the transfers and the testimony that the transfers were for value was not credible. Additionally, the family members have since funnelled some of these funds back to Spagnoli. Defendants have not demonstrated that they acted in good faith.
22. Accordingly, a judgment against the Spagnoli relatives will be entered on the Eighth and Ninth Counts of the Verified Amended Complaint as follows:
(A) The $ 30,000 transfer to Barry Spagnoli on August 10, 1990 is avoided and Barry Spagnoli shall transfer $ 30,000 to the RTC and prejudgment interest thereon from August 10, 1990 within 60 days hereof;
(B) The transfer of 14 Seven Oaks to Barry Spagnoli by William and Beverly Spagnoli on December 26, 1990 is avoided and Barry Spagnoli's interest in said property shall be limited to the fraction of the stated consideration of the December 26, 1990 deed against the total price of the property which is $ 96,000 over $ 480,000 or 20%;
(C) William and Beverly Spagnoli shall transfer the remaining 80% interest in 14 Seven Oaks to the RTC within 60 days hereof;
(D) All rental income obtained by Barry Spagnoli relating to 14 Seven Oaks shall be snared by the RTC and Barry Spagnoli in the above-mentioned percentages; however, Barry Spagnoli shall have no right to any rents or profits on 14 Seven Oaks until he has satisfied the $ 84,365 judgment entered against him as a result of the summary judgment motion and 530,000 judgment entered against him herein;
(E) The $ 91,000 transfer to Annette Spagnoli on August 24, 1990 is avoided and Annette Spagnoli shall transfer $ 91,000 and prejudgment interest thereon from August 24, 1990 to the RTC within 60 days hereof;
(F) The $ 64,000 transfer to Paul Longo on August 24, 1990 is avoided and Paul Longo will transfer to the RTC $ 64,000 and prejudgment interest thereon from August 24, 1990 within 60 days hereof;
(G) The $ 30,000 transfer to Charles Ballister is avoided and Charles Ballister shall transfer to the RTC $ 30,000 and prejudgment interest thereon from the date of the transfer within 60 days hereof; and
(H) To the extent that any defendant herein cannot satisfy his/her obligations relating to the transfer of funds, a money judgment for the deficiency shall be entered against him or her.
Counsel for the RTC is to submit an order reflecting these Findings of Fact and Conclusions of Law within ten days of this date.
MARYANNE TRUMP BARRY
January 4, 1993