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157 B.R. 914, 918 (Bankr. S.D. Fla. 1993).
Other transactions such as fraudulent conveyances are reversible because they would be reversible in State court by an aggressive and appropriate creditor and/or because they deprive the estate of value and provide a bonus to the transferee. Finally, "lien avoidance" actions under sections 544 and 546 exist in order to give the unsecured creditors in bankruptcy the rights of an aggressive lien creditor outside of bankruptcy.
II. PREFERENTIAL TRANSFERS.
When a court determines whether a transfer is preferential, the focus is on the effect which the transfer has on the debtor's estate and not the state of mind of the debtor or the creditor. Casarow v. Chomenko (In re Cobb), 231 B.R. 236 (Bankr. D.N.J. 1999).
However, Judge Lundin stated that:
"Looking only at the 'trees' and parsing each component of the refinancing, it is easy to conclude that the transfer allowed CCC to receive more than it would receive in a Chapter 7 case. . . . Viewed in this narrow light, perfection of the new lien enabled CCC to realize a greater share of the estate."
However, in transactions that involve collateral substitution or renewal of a lien or security interest many courts have measured the transaction as a whole to determine whether the estate was diminished.
Gregory v. Cnty. Credit Corp. (In re Biggers), 249 B.R. 873, 877 (Bankr. M.D. Tenn. 2000).
