By: Derek Hawkins//October 8, 2019//
WI Court of Appeals – District III
Case Name: Daniel R. Freund v. Nasonville Dairy, Inc.,
Case No.: 2018AP1215
Officials: Stark, P.J., Hruz and Seidl, JJ.
Focus: Statutory Interpretation – Judgment – Preference
Nasonville Dairy, Inc. (“Nasonville”) appeals a judgment awarding $290,000 to Daniel Freund, as receiver for Liberty Milk Marketing Cooperative (“Liberty”). Following a bench trial, the circuit court concluded that Nasonville’s receipt of a $290,000 payment from Liberty, which occurred less than one month prior to when Liberty entered receivership, constituted a preferential transfer that disadvantaged Liberty’s other similarly situated creditors. The court concluded the preference was voidable and ordered that Freund recover the $290,000 payment from Nasonville.
The first issue on appeal concerns a question of statutory interpretation regarding what elements must be proved to render a preference voidable under WIS. STAT. § 128.07(2) (2017-18). We conclude a preference is voidable under that subsection if (provided the other statutory requirements have been satisfied) an ordinarily prudent business person would, under the circumstances, have reasonable cause to believe both that the transferor is insolvent and that the effect of the transfer would be to enable the recipient to obtain a greater percentage of debt than any other creditor of the same class.
The circuit court did not explicitly resolve the parties’ disagreement regarding how WIS. STAT. § 128.07(2) should be interpreted, but it did make findings of fact and ultimately determined that Nasonville had reasonable cause to believe its receipt of the $290,000 would effect a preference. We conclude the evidence was sufficient to support the court’s conclusion that the payment at issue constituted a voidable preference. Specifically, there was sufficient evidence upon which the court could reasonably determine that Nasonville had reasonable cause to believe at the time of the payment both that Liberty was insolvent and that receipt of the payment would allow Nasonville to obtain a greater percentage of its debt than other general unsecured creditors. We therefore affirm.
Recommended for Publication