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Bankruptcy – Real Property – Mortgage – Avoidable Transfer (access required)

Goldman v. Capital City Mortgage Corp. The 4th Circuit upholds a decision for a Chapter 7 bankruptcy trustee who sued appellant mortgage company to avoid transfer of an 11.8-acre parcel of real estate in Maryland pledged by debtor; the court accepts the trial court finding that the mortgage company did not show it was a transferee who took for value, in good faith and without knowledge of the voidability of the transfer, under 11 U.S.C. § 550(b). The transferee, Capital City Mortgage Corporation (CCM), argues that our holding in Smith v. Mixon, 788 F.2d 229 (4th Cir. 1986), requires us to find that the absence of actual knowledge of the voidability of the transfer is all that is needed to find good faith under § 550(b)(1). We do not agree.

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