The opinion of the court was delivered by: Mcavoy, Chief Judge.
MEMORANDUM — DECISION & ORDER
Plaintiff United States of America ("plaintiff") commenced an
action against defendants pursuant to 26 U.S.C. § 7401 and 7403
to reduce tax assessments to judgment against Sheldon Hansel and
to set aside certain alleged fraudulent conveyances of stock to
Defendants Christy, Grant, Shelley, and Hope Hansel.*fn1 By
Memorandum — Decision & Order dated March 14, 1998, familiarity
with which is
assumed, see United States v. Hansel, 999 F. Supp. 694 (N.D.N Y
1998), the Court granted summary judgment against Sheldon,
Christy, Grant and Shelley Hansel.*fn2 Plaintiff now moves
pursuant to FED. R. CIV. P. 56 seeking summary judgment against
Defendant Hope Hansel declaring that the one share of stock
transferred to Eunice Hansel and re-transferred to Hope Hansel be
set aside as fraudulent.
The facts surrounding the instant litigation were fully set
forth in the Court's prior decision, Hansel, 999 F. Supp. 694.
In brief, in 1983 the Internal Revenue Service ("IRS") commenced
an examination of Sheldon and Hope Hansel's tax liabilities for
the years 1980 and 1981. In 1984, Sheldon and Hope transferred
their farm land, buildings, and equipment into a farm corporation
entitled Hanwinsel Farms, Inc. ("Hanwinsel") in exchange for all
200 shares of outstanding stock in the Corporation (100 shares to
Sheldon, 100 to Hope). On June 25, 1985, the IRS sent Sheldon and
Hope a Notice of Deficiency in the amounts of $70,691.00 for 1980
and $86,603.00 for 1981, plus interest and penalties. In
September 1985, Sheldon and Hope filed a petition with the United
States Tax Court for a determination of the tax liabilities set
forth in the Notice of Deficiency.
In 1987, Sheldon transferred 45 shares of stock in Hanwinsel
equally to each of his children. In 1989, Sheldon transferred his
remaining 55 shares as follows: 30 shares equally to each of his
children; 25 shares to his mother, Eunice Hansel.
On January 23, 1991, the Tax Court determined Sheldon to have
deficiencies of $20,909.00 for 1980 and $53,030.00 for 1981.
Shortly before her death in 1995, Eunice transferred her 25
shares as follows: 8 shares to each of her grandchildren (Sheldon
and Hope's children); 1 share to Hope.
The plaintiff thereafter commenced the instant litigation
seeking to: (1) reduce to judgment the tax assessments against
Sheldon Hansel; (2) set aside the fraudulent transfers by Sheldon
Hansel to Christy, Grant, Shelley, and Eunice; and (3) obtain
judgments against Christy, Grant, Shelley and Eunice in amounts
equal to the value of the shares of stock conveyed to them, plus
dividends, profits, and increases in the value of the stock. By
Memorandum — Decision & Order dated March 14, 1998, Hansel,
999 F. Supp. 694, the Court granted summary judgment to plaintiff and
declared the stock conveyances to be fraudulent under New York
Debtor and Creditor Law § 273. Judgment was subsequently entered
in favor of the United States and against Sheldon Hansel in the
amount of $222,007.21, plus interest. The judgment provided that
"[t]he conveyances of that interest in the stock of Hanwinsel
Farms, Inc., for no consideration by Sheldon G. Hansel to Eunice,
Christy, Grant and Shelley Hansel were fraudulent under N Y
Debt. & Cred. L. § 273."
Plaintiff now moves pursuant to Fed. R.Civ.P. 56 seeking
summary judgment that one of the shares of stock fraudulently
transferred to Eunice and re-transferred by her to Hope remains
tainted and must be set aside.
A. Fraudulent Transfer of Stock to Eunice Hansel
Because plaintiff is a creditor, see United States v. Kaplan,
267 F.2d 114, 117 (2d Cir. 1959); United States v. Scharfman,
1981 WL 1855, at * 5 (S.D.N.Y. Aug. 14, 1981), and the Court
already found the transfers to be fraudulent pursuant to § 273,
the Court need not consider whether the transfers were also
fraudulent under § 276.
B. Whether Hope Hansel is a Purchaser in Good Faith
The Court's inquiry does not end there because Eunice
re-transferred one share of Hanwinsel stock to Hope. Thus, the
conveyance may be set aside only if Hope is not a purchaser in
good faith. See N.Y. Debt. & Cred. L. §§ 278, 279; Atlantic
Bank of New York v. ...