Dietz v. Langlie (In Re Farr)

FEDERMAN, Bankruptcy Judge.

Plaintiff Michael S. Dietz, the Chapter 7 Trustee in Debtor Rodney N. Farr’s bankruptcy case, appeals from the Bankruptcy Court’s judgment determining that funds previously held in the Debtor’s bank account were held subject to a constructive trust in favor of Defendant Ronald Lang-lie. Plaintiff contends that such funds were an asset of the Debtor and that the pre-bankruptcy payment of such funds to Langlie was a preferential or fraudulent transfer. For the reasons that follow, we reverse.

FACTUAL BACKGROUND

The Debtor and Langlie have been friends since childhood.…